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 Genel Energy tops up Iraqi Kurdistan interests with US$240 mln deal

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Genel Energy tops up Iraqi Kurdistan interests with US$240 mln deal  7.8.2012 
By Jamie Ashcroft - The Proactive Investors

Genel Energy chief executive Tony Hayward. Photo: Getty Images
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August 7, 2012

Kurdistan focussed Genel Energy (LON:GENL) on Monday increased its interests in the semi-autonomous Iraqi Kurdistan region with a US$240 million acquisition.

Through a deal with Hawler Energy it has bought an additional 21 per cent stake in the Bina Bawi exploration block, which lies adjacent to the firm’s producing Taq Taq oil field.

Genel already owned a 23 per cent stake prior to the deal. And the oil and gas field, where three wells have now been drilled, is currently believed to contain between 500 and 1 billion barrels of oil equivalent.

"This acquisition gives us a material interest in a third major oil and gas development (alongside Taq Taq and Tawke) and reinforces Genel's leading position in the Kurdistan oil and gas province,” said Genel chief executive Tony Hayward.

“It is consistent with our strategy of continuing to build our Kurdistan business through selective acquisitions and our ongoing exploration drilling programme."

This deal comes at a time when Kurdistan assets appear to be in high demand. In recent weeks Total, Chevron and Gazprom have moved into the semi-autonomous region, joining ExxonMobile which is believed to have taken up several blocks.

In addition to Genel, there are a number of London listed oil firms with assets in Kurdistan – firms like Gulf Keystone Petroleum, Afren and Petroceltic.

The increasingly prolific oil province got a significant boost last week when it emerged that the Kurdistan Regional Government (KRG) was ready to resume oil exports, at a rate of 100,000 barrels a day.

However the fraught and politically complex relationship between north and south meant this wasn’t a straightforward offer to turn the taps back on.

The Kurdistan Regional Government has threatened to resume the embargo at the end of the month unless it receives an estimated US$1.5 billion in oil payments it says are being withheld by the Iraqis.

“What I have in mind is to restart the oil export for only one month, i.e. for all of the August period,” said the KRG’s Natural Resources Minister Ashti Hawrami in letter written at the end of last month.

“If the payments are not released by the end of this period, then we agree to halt all the export at the midnight of 31st August.”

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