Genel Energy sets its eyes on North Africa

LONDON - Reuters

Genel Energy’s Executive Board DirectorSepil is seen here. Genel will buy assets in Malta, Libya and Tunisia, he says. Company photo

London-listed oil explorer Genel Energy announced deals that will help it to diversify into the Mediterranean and North Africa yesterday, building on its strategy to expand outside its core Kurdistan Regional Government (KRG) territory in Iraq’s north.

Ankara-based Genel said it would acquire 75 percent of Mediterranean Oil & Gas’s interests in an offshore Malta contract for up to $30 million, with an additional agreement to assess and acquire further assets in Malta, Libya and Tunisia.

It also said it would farm in to 60 percent and assume ownership of the Sidi Moussa block offshore Morocco for up to $50 million.

Genel’s first foray into the Mediterranean

Although the acquisitions are small, they mark the first foray for Genel into the region. The majority of its acreage is in northern Iraq, and it also has assets in Somaliland and Cote d’Ivoire.

Genel was formed last year when former BP Chief Executive Tony Hayward and financier Nathaniel Rothschild’s bid vehicle bought Turkey’s Genel Enerji. Hayward, now Genel CEO, has said that the company wanted to diversify and that its Turkish background lent it a natural advantage in the North
African region. On Aug. 21, it splashed out around $450 million on part of Heritage Oil’s stake in a gas discovery in the KRG.

Yesterday’s deals were announced alongside Genel’s results for the six months to end-June. It ended the period with a net cash pile of $1.8 billion and said it had earmarked around $1 billion to buy further assets.

With revenues for the first half of $123 million, it retained its guidance for full year sales of $250 million to $300 million.

Average production of 40,000 barrels of oil per day was still expected, it said, though that could rise if it is able to continue exporting from the KRG throughout 2012.