One dud oil field doesn't set a trend as Kurds keep drilling - WORLD OIL

5/10/2017

Angelina Rascouet

LONDON (Bloomberg) -- When one of the biggest crude producers in Iraqi Kurdistan downgraded reserves in March, doubts about the economic potential of the region -- a key player in the fight against Islamic State terrorism -- deepened. But evidence suggests it’s too soon to write off the emerging oil province.

The downgrade at Genel Energy Plc’s Taq Taq field, the second in little more than a year, sent its shares tumbling amid gathering anxiety over a region already struggling with weak crude prices and escalating costs to fight militants.

Yet that disappointment stands in contrast to improving prospects elsewhere in Kurdistan. DNO ASA, the area’s biggest publicly listed producer, this month doubled the number of wells planned for 2017 at its Tawke field, while competitor WesternZagros Resources Ltd. increased reserve estimates in March.

UPDATE 2-Genel targets Turkey gas deal this year to overcome oil troubles - REUTERS

LONDON Thu Mar 30, 2017 | 5:15am EDTKarolin Schaps; Editing by David Evans and Susan Thomas

• $779 mln in exploration write-offs in 2016
• Annual operating loss of $1.2 bln
• Shares recover slightly after record low on reserves cut
• Receivables fall to $253.5 million (Recasts with gas projects, adds CEO, analyst comments, share price)

Genel Energy, the oil producer chaired by former BP boss Tony Hayward, expects to strike a gas-export partnership deal with Turkey Energy Company this year, it said on Thursday, as it tries to overcome setbacks in oil exploration.

Genel slipped further into the red last year after it again downgraded reserves at its flagship oilfield and weak oil prices ate into profits, it said.

Genel Shares Hit All-Time Low As Oil Reserves Disappear - RIGZONE / REUTERS

Tuesday, March 28, 2017
Esha Vaish, Justin George Varghese (Bengaluru), Dmitry Zhdannikov (London); editing by Louise Heavens

March 28 (Reuters) - Genel Energy's market value collapsed to an all-time low on Tuesday after it said for a second time that its flagship oilfield contains less crude than expected, dealing another blow to chairman Tony Hayward to rescue the indebted Kurdish producer.

Since listing in 2011 and claiming to be the largest independent UK listed firm by reserves, Genel has been hit by a string of unsuccessful exploration campaigns in Africa and reserves at its largest Iraqi Kurdistan field shrinking to just a tenth.

Investors who bought into Genel at 11 pounds ($13.8) a share in early 2014 were left with 60 pence on Tuesday as reserve cuts, an oil price collapse and Iraq's fight against Islamic State hammered the stock.

RPT-UPDATE 1-Genel courts Turkey with Kurdish gas to reduce reliance on Russia - REUTERS

Apr 27, 2016

• Genel in talks with Turkish state-backed firm on stake in fields
• Deal would help Turkey diversify supplies after Russian dispute
• Could help Genel and Chairman Hayward regain investor confidence (Recasts, adds details, background)

By Ron Bousso

LONDON, April 27 Genel Energy, chaired by former BP head Tony Hayward, is betting on a major deal with Turkey to jointly develop gas fields in Iraqi Kurdistan which will help Ankara reduce its reliance on Russian supplies after relations soured with Moscow.

The deal, if it goes through, could help London-listed Genel regain investor confidence after it steeply downgraded its oil reserves two months ago - leading to it losing a third of its market value, contributing to its biggest-ever annual loss and piling pressure on Hayward.

Genel drops by a record after slashing Kurdistan’s Taq Taq reserves - WORLD OIL / BLOOMBERG

By RAKTEEM KATAKEY on 2/29/2016

LONDON (Bloomberg) -- Genel Energy Plc, a UK oil producer operating in Iraq’s Kurdish region, fell by a record in London trading after cutting the reserves estimate for its largest field by almost half.

Genel dropped as much as 25% on Monday, the biggest decline since the stock started to trade in June 2011, and was down 23% at 95.75 pence as of 9 a.m. local time.

The company reduced its estimate for gross recoverable proven and probable, or 2P, reserves at the Taq Taq deposit to 356 MMbbl from 683 MMbbl as of mid-2011 and will take a $1 billion charge, it said in a statement. Genel owns a 44% stake in the field.

Turkey, Kurds in Duel Over Energy - NATURAL GAS EUROPE

February 19th, 2016

The intensification of ground warfare in Syria, internal strife in Turkey and the rhetoric of combat throughout the region are jeopardising prospects for both a gas pipeline from northern Iraq to Turkey and independence for the Iraqi Kurds.

On February 18, Kurdish separatists in Turkey warned against attempts to build a gas pipeline from Iraqi Kurdistan to Turkey, saying this would only stand to benefit Turkey’s ruling Justice Party, known by its Turkish initials as the AKP.

The statement from the Group of Communities in Kurdistan (KCK), an offshoot of the banned Kurdistan Workers’ Party (PKK) which is leading the revived war against Turkish rule in Kurdish areas of southeastern Turkey, came at a critical juncture. The day before, at least 28 people were killed in a car bomb attack on buses carrying soldiers to a military barracks in Ankara while a second attack, in the southern district of Lice on February 18 killed a further six members of the security forces.

Cash-Strapped Iraqi Kurds to Start Gas Exports to Turkey in 2016 | Bloomberg

Khalid Al Ansary Bruce Stanley, January 13, 2016

• Pipeline to start shipping natural gas to Turkey by year end
• Kurdish gas to give Turkey alternative to imports from Russia

Iraq’s Kurds will start building their first natural gas pipeline next month to export the fuel to Turkey, a project that would bring the self-governed region closer to economic independence.

The link will transport gas from the Khor Mor and Chamchamal fields in northern Iraq’s Kurdish enclave, first to Turkey and later to Europe, Bewar Al-Khinsi, an economic adviser to the Kurdistan Regional Government, said in a phone interview. The KRG will begin shipping 10 billion cubic meters a year by the end of 2016 and double the volume to 20 billion by 2020, he said.

“The pipeline will be a source of revenue for the KRG and a step to help Turkey overcome a gas crisis that may arise” as a result of Turkey’s soured relations with Russia, an important gas supplier to the Turks, he said.

The KRG is struggling to pay its bills, including money owed to foreign energy companies including DNO ASA and Genel Energy Plc. A 35 percent collapse last year in the price of Brent crude is adding to strain on KRG finances at a time when the regional government must also pay the cost of fighting against Islamic State militants that control parts of northern Iraq. The country’s Kurds have long chafed against control by Arab-led governments in Baghdad, and gas exports would enhance their financial self-sufficiency.

Kurdish Reserves

The Kurdish region could hold as much as 200 trillion cubic feet of natural gas reserves, or about 3 percent of the world’s total deposits, according to the website of the KRG Ministry of Natural Resources. It also holds 45 billion barrels of crude oil reserves -- equivalent to almost a third of the deposits in the rest of Iraq, according to BP Plc data. Turkey offers the sole route to market the expanding Kurdish oil industry.

Turkey will help pay for the 831-kilometer network, which will run parallel to an existing oil pipeline, and Ankara-based Botas Boru Hatlari Ile Petrol Tasima AS will build it, Al-Khinsi said. The 181-kilometer section inside Kurdish territory will cost an estimated $750 million, he said. The project is the result of an agreement that the KRG and Turkey reached in 2013 to build two pipelines, one for oil and another for gas.

Dana Gas PJSC, a United Arab Emirates-based energy company operating in Kurdish Iraq, holds a 40 percent stake in both the Khor Mor and Chamchamal fields through its Pearl Petroleum Co. venture, according to Dana Gas’s website. All gas produced in the Kurdish region is currently sold locally, and the company wants eventually to sell fuel to Turkey and Europe, Dana Gas Chief Executive Officer Patrick Allman-Ward said Tuesday in Abu Dhabi.

SOURCE

Turkey sets date for tender of gas pipeline from Iraqi Kurdistan | Today's Zaman

December 29, 2015

The state-owned Turkish Pipeline Corporation (BOTAŞ) will open a tender on Feb. 9 for the construction of the Şırnak Natural Gas Pipeline, which will integrate the natural gas of northern Iraq into Turkey's gas grid, the company said on Monday.

According to BOTAŞ's statement, the tender will include the construction of a 180-kilometer pipeline which is expected to commence operation in 2018, carrying up to 20 billion cubic meters (bcm) of gas a year. The pipeline is planned to be connected to the national gas network through a valve at an existing pipeline in Mardin province. Northern Iraq reportedly has 5 trillion cubic meters of gas reserves.

Rattled by the fallout from the downing of a Russian jet, Turkey has geared up to diversify its gas suppliers in order to ensure its energy security. Even though Russia, its main supplier, has avoided imposing restrictions on gas exports to Turkey since then, the Turkish government has engaged in negotiations with its remaining suppliers in a bid to boost the volume of its current imports and to establish alternative sources with new partners.

Turkey currently imports 95 percent of its energy from abroad and fulfills 55 percent (27 bcm) of its annual natural gas requirements (50 bcm) and 30 percent of its oil needs with imports from Russia. Since Turkey downed a Russian warplane over an airspace violation in late November, both diplomatic and economic ties between the two countries have been strained.

An interruption in gas flow to Turkey also poses a risk to the electricity network as the country generates 48.1 percent of its electricity via natural gas, according to government data.

Meanwhile, Turkish media reported on Tuesday that the Energy Market Regulatory Agency (EPDK) will announce in its Thursday meeting a hike in electricity prices for households by between 5 to 10 percent, effective as of January. The last time the EPDK increased unit prices was on Oct. 1.

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as reported by Anadolu Agency
BOTAS to open Sirnak gas pipeline to tender in February
Sirnak natural gas 185 kilometer-long pipeline will transfer gas from KRG to Turkey, according to BOTAS
The Sirnak Natural Gas Pipeline that plans to carry gas from the Kurdish Regional Government (KRG) region to Turkey will be opened to tender on Feb. 9, 2016, according to the Petroleum Pipeline Corporation, BOTAS announcement on its website.

After Turkey’s shooting down of a Russian military jet last month, Turkey accelerated its efforts to diversify energy sources as a precaution for any possible gas cuts from Russia. 

As part of that process, the transfer of gas from the KRG region moved up on the agenda with Turkey's decision to advance the project. As a result, the pipeline will be opened to tender in February.

The pipeline will run its 185 kilometer length from Mardin in Turkey's southeast and will finish in Sirnak, on the Silopi border in Turkey's southeastern Anatolia region. It will be connected to the existing Mardin gas pipeline 35 kilometers from its originating point and is planned for connection to Turkey's national gas grid at the Serenli station in Mardin. The 40 inch diameter pipeline will be constructed in 720 days. 

Tony Hayward, head of Genel Energy, a company operating in the KRG, stated in a conference in November that the region has 5 trillion cubic meters of natural gas reserves - enough to meet Turkey's needs for 50 years. 

He also explained that the first flow from the region to Turkey may be delivered in two to three years’ time with a starting capacity of around 10 billion cubic meters. 

"This amount may increase to 20 billion cubic meters at the beginning of 2020," he added. 

By Nuran Erkul, Anadolu Agency


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