A new force in Exploration and Production
On September 2011, Genel Energy (Genel) appeared as a new company resulting from the merger between Vallares PLC and Genel Energy International with a new Chief Executive Officer named Tony Hayward, the former CEO of BP.
Immediately, Genel Energy got registered in Jersey, listed at the London Stock Exchange with headquarters in Erbil in the Kurdistan Region of Iraq and in Ankara, Turkey.
Vallares PLC is a build-on-purpose investment fund launched by Nathaniel Rothschild with $2 billion IPO to merge with Genel Energy International and to bring in Tony Hayward as CEO of the new Genel entity.
Until then Genel Energy International was a Turkish company, part of Cukurova Holdings, belonging to the richest man in Turkey, the billionaire Mehmet Emin Karamehmet.
As a Turkish company, Genel Energy International had established historical relationships with the Kurdistan Region of Iraq under Saddam Hussein era to explore and develop untapped oil and gas reserves.
After Saddam Hussein, Genel Energy International managed to preserve its licenses in the Kurdistan Region and to have shares in the unique refinery.
The licenses in the Kurdistan Region of Iraq are based on production sharing contracts (PSC) more profitable for the companies than the Technical Services Contracts (TSC) proposed by the Federal Government of Iraq.
Actually Genel is the largest producer of oil and the largest holder of reserves in the Kurdistan Region of Iraq with six production sharing contracts in the Taq Taq, Ber Bahr, Tawke, Miran, Dohuk and Chia Surkh fields.
In 2011, the Taq Taq and Tawke fields produced over 140,000 b/d of crude oil and is expected to grow up to 200,000 b/d in 2013.
Genel estimates its production costs in the Kurdistan Region of Iraq around $2-3 per barrel.
Genel Energy is a young junior oil company, but with large financial resources and highly experienced management to develop it on fast track.
Genel Energy Key Figures
The company was incorporated on 1 April 2011 and the acquisition of Genel Energy International Limited (“GEIL”) completed on 21 November 2011.
Therefore no yearly results of the newly formed Genel Energy company were published yet.
– 2011 Capital Expenditure: $86 million
– 2010 Capital Expenditure: $46 million
– 2009 Capital Expenditure: $68 million
Genel Energy Projects and Business Highlights
With Tony Hayward on the driving seat and a Rothschild fund to power the newly formed company, Genel Energy was born for growth.
A high speed growth based on a four-pronged strategy:
– Maintain the highest level of corporate governance
– Maximising the potential from our existing assets in the Kurdistan Region on a cash flow-neutral basis
– Create value with the drill bit
– Build a major regional E&P company over the next 3 to 5 years
To support this strategy for growth
– Boost production to 200,000 b/d in Taq Taq oil field and from 150,000 to 200,000 b/d on Tawke by 2014 with infrastructures upgrades
– Expand the Kirkuk Ceyhan (KICE) export pipeline
– Build a $2.5 billion gas processing facility in Miran
In addition to the oil and gas reserves and its financial power, the other Genel‘s valuable assets rely in its partners in the six production sharing contracts.
The major player is Addax Petroleum which hold 36% of the Taq Taq PSC.
Addax Petroleum is now the property of Sinopec.
In Miran, Genel just bought 26% share from Heritage Oil to get a total of 51% and took an option on the remaining 49% under the form of loan.
The production sharing contracts in the Kurdistan Region of Iraq are as attractive as the potential of its untapped oil and gas reserves.
Genel Energy is mobilizing the most advanced technologies and financial resources to build its market leadership in the Kurdistan Region of Iraq with the additional support of Turkey as premium customer.
