Genel Energy ups production one third after KRG pipeline

LONDON

The KRG-Turkey pipeline has increased oil voulme by 50 percent.

Genel Energy expects to increase production approximately 50 percent in 2013, fueled by the assumptions regarding the volume of oil exports through the newly constructed pipeline from the Iraqi Kurdish region into Turkey.

The gross production from the Taq Taq field averaged 77,000 barrels per day and the Tawke field averaged 39,000 barrels a day, in which Genel has 44 and 25 percent shares respectively, the company said in an update statement.

The production in Northern Iraq has remained at 44,000 barrels, falling slightly short of the 45,000 barrels target, but the revenues from oil sales totaled $350 million, which is within the company’s advised range of $300 to $400 million, the statement read. As sales were at $333 million, the London-listed company maintained increasing revenues even slightly.

“Production volumes at Taq Taq in the past two months were hit by a fire in a tanker loading station during November. At Tawke, meanwhile, ‘price sensitivity issues’ in the domestic market meant production volumes were lower in the fourth quarter,” the company explained.

“The energy agreement between the Kurdistan Regional Government (KRG) and Turkey and the completion of the KRG independent pipeline infrastructure has paved the way for steadily rising oil export volumes from Taq Taq and Tawke over the course of 2014,” Genel CEO Tony Hayward was quoted as saying in the report.

Due to rising production and exports via the new pipeline, Genel says this year it will generate revenues of $500-600 million.

The energy company also highlights that a gas sales agreement between the Turkish government and the KRG was signed in November. The deal foresees gas exports in the order of 4 billion cubic meters per year from 2017, rising to 10 billion cubic meters by 2020.

“Production from the Miran and Bina Bawi gas fields, owned by Genel, are expected to underpin the gas sales agreement,” the firm forecasted.