Genel Energy to take about $1 bln impairment on northern Iraqi field

ARBIL/LONDON

Genel Energy Plc said it expected to book about $1 billion in impairment to the 2015 value of its Taq Taq oilfield in the Kurdistan Regional Government (KRG) in northern Iraq, citing a reduced estimate for recoverable reserves there and falling oil prices, as reported by Reuters on Feb. 29. 

Shares in the company lost nearly a fourth of their value in early morning trade in London.

Following a review, the oil producer said it estimated that Taq Taq had proven and probable reserves of 356 million barrels of oil (mmbls) as of Dec. 31, 2015, down from its earlier assumption of 683 million barrels in June 30, 2011.

By the end of last year, the Taq Taq field had already produced 184 mmbbls gross.

The news comes after Genel said earlier this month that it would resume drilling work at Taq Taq in the coming weeks to ramp up production, despite a roughly 40 percent fall in oil prices over the past year to around $30 a barrel.

The move would have marked the first time in more than a year that Genel has drilled in the region to increase output from its fields after the KRG struggled to pay producers for oil exports.

Meanwhile, carrying around 600,000 barrels per day (bpd) of crude to Turkey’s Mediterranean port of Ceyhan from fields in Iraq’s Kurdish region and Kirkuk, the pipeline has been offline since Feb. 17.

 Turkey said it has begun work to repair the pipeline and aims to restore flows in the shortest possible time, the Turkish Energy Ministry said on Feb. 27. 

“The pipeline was halted on Feb. 17 due to temporary security measures following sabotages of the terrorist [outlawed Kurdistan Workers’ Party] PKK,” the ministry said in a written statement.