Genel Sees Output Upside If Kurds Reach Deal With Baghdad
Genel Energy Plc (GENL), the biggest oil and gas operator in Kurdistan, said its output this year will be higher than currently estimated if the Kurds and Iraq’s central government agree on oil exports to Turkey.
Officials from the semi-autonomous Kurdistan Regional Government and the federal government are negotiating how to market the crude that’s already flowing through the pipeline from Kurdistan to Turkey completed last year. Genel expects production of as much as 70,000 barrels of oil a day this year, compared with 44,000 barrels a day in 2013.
“If we had an agreement, we could see upside from where we are today,” Genel Chief Financial Officer Julian Metherell said in a telephone interview. “The guidance is based on no agreement.”
Kurdistan will still be able to sell exports even without a deal with the federal government because Turkey is committed to its agreements to take the oil, Metherell said.
Shares of Genel closed little changed at 1,085 pence in London.
Chief Executive Officer Tony Hayward, the former head of BP Plc, has expanded Genel’s assets in the northern region of Iraq since taking over two years ago in the hope of expanding exports. Genel has risen 39 percent in London trading since the start of 2013.
Genel reported 2013 profit of $186.5 million, up from $75.9 million in 2012. It also said that a well in the Cap Juby prospect in Morocco encountered oil, and that the deep well at its Taq Taq field in Kurdistan showed about 300 meters (1,000 feet) of gas and condensate.
The company has $700 million in cash on its balance sheet, which it may use for acquisitions or eventually return to shareholders, Metherell said.
“It’s been a very strong year across the board, and 2014 has plenty of catalysts to make it another big year,” Metherell said.
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