Genel Expands Into North Africa After Kurdistan Acquisitions
Genel Energy Plc (GENL), the Iraq-focused oil company run by former BP Plc (BP/) Chief Executive Officer Tony Hayward, expanded into North Africa including offshore areas of Morocco and Malta after building up its position in Kurdistan.
The deals add about 25,000 square kilometers (9,700 square miles) of acreage to Genel’s portfolio and follow a $450 million deal to boost its position in the Miran gas field. The company still has about $1 billion to spend on acquisitions.
“This is a high-impact exploration portfolio to pursue outside of Kurdistan,” Chief Financial Officer Julian Metherell said in a telephone interview. “We’re playing in a huge geography and we continue to see huge opportunities.”
Genel is targeting production of about 200,000 barrels of oil a day in Kurdistan by the time a new export pipeline is completed next year. The company says it will expand further outside of Kurdistan, with more exploration acreage, as well as drilling seven wells in Iraq this year and next.
Genel rose 0.8 percent to 700 pence in London.
The African assets are Hayward’s first venture outside of Kurdistan with Genel and the first offshore acreage. In Morocco, Genel gets 60 percent of the Sidi Moussa block from Serica Energy Plc (SQZ), San Leon Plc (SLE) and Longreach Oil & Gas Ventures Ltd. for $1.3 million and as much as $50 million of drilling costs.
The company acquired 75 percent of Area 4 Offshore Malta from Mediterranean Oil & Gas Plc (MOG) and bought into blocks in Somaliland and Ivory Coast. Metherell declined to comment on where the company may buy next, while saying East Africa has become too expensive after the sale of Cove Energy Plc, which holds an interest in a gas field off Mozambique.
Genel said Aug. 6 it’s increasing its stake in the Bina Bawi field, and earlier this week reported a deal with Heritage Oil Plc (HOIL) to boost its interest in Miran, which holds about 10.5 trillion cubic feet of gas. Genel purchased part of Heritage’s interest in Miran yesterday.
Metherell said it’s “very likely” that Genel will end up owning more of Miran and the field will provide natural gas to Turkey. Genel reported a profit before tax in the first half of $22.3 million, after a $5.7 million loss a year earlier.
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