Iraq ‘lost fight against Arbil’ says Mehmet Sepil of Genel Energy

August 12, 2012 at 9:07 am | Posted in Turkmens | Leave a comment
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The northern Iraqi oil fields have proven their potential, while the slow action in southern Iraq is pushing energy firms toward the north, according to Mehmet Sepil (inset) of Ankara-based Genel Energy. Hürriyet photos

Iraq ‘lost fight against Arbil’

ISTANBUL – Anatolia News Agency

The central government in Baghdad has lost its energy fight against the regional administration in Arbil, says Mehmet Sepil, the chief executive of Genel Energy, which is active in the lucrative northern Iraqi oil fields

The central Iraqi government in Baghdad has lost its energy struggle against the rapidly developing Kurdistan Regional Government (KRG), which controls the autonomous north, according to Mehmet Sepil, the chief executive of Genel Energy, one of the most influential companies operating there.

The lingering problems between Baghdad and Arbil over opening the northern oil and gas fields to international companies has been solved “de facto,” Sepil told Anatolia news agency in an interview.

“Baghdad has lost its oil and natural gas fight against northern Iraq,” Sepil said. “Let’s take a look at companies operating there currently: Exxon, Chevron, Total and Gazprom. These are some of the largest oil companies in the world. What’s more, Exxon, Total and Gazprom are also working in Baghdad [oilfields]. Baghdad says it will put those who operate in northern Iraq on a blacklist, but the largest companies in the world are working there. This issue is over. In addition, Baghdad operates too slowly, so the oil companies are escaping from there and moving to the north. The energy fight is over today. The important question is when Baghdad will admit this.”

Ankara-based Genel recently bought 21 percent of U.S.-based Hawler Energy’s share in the Bina Bawi field, raising its share there to 44 percent, Sepil saidd.

“The region will see a large consolidation. The number of [oil]companies in northern Iraq, which is between 40 and 50 today, will fall to between 10 and 15 in two or three years,” Sepil said, adding that the region has already proved its potential. What is happening in northern Iraq is typical, according to Sepil. “First the small companies penetrate, they find the oil, and sell [the field] after benefiting from it. Now this is the process taking place in northern Iraq.”

Genel to transport Kurdish gas and oil to Turkey

The company’s goal is to bring Kurdish gas and oil to Turkey. Sepil estimates that northern Iraq’s oil production will be at 1 million barrels per day by 2015. “Turkey may be able to buy twice what it currently needs from northern Iraq soon. It may also buy some 10-15 billion cubic meters of natural gas from there.”

Turkey’s natural gas demand has increased by some 2 million cubic meters annually due to rapid growth. The only way for Turkey to cut costs will be to diversify its current supplies from Russia, Azerbaijan and Iran.

Genel Energy was formed by the merger of Vallares and Genel Energy International in November 2011. Vallares was a fund founded by former BP CEO Hayward, British financier Nat Rothschild, banker Julian Metherell and investment manager Tom Daniel. Genel Energy International was owned by Mehmet Emin Karamehmet, a Turkish tycoon. The merged company trades on the London Stock Exchange.
After the merger, Genel had capital worth $3 billion, Sepil said, noting that the company is determined to take its place in the consolidation in northern Iraq with its current potential of $1.4 billion. The company’s investment plans also include Africa. Genel is the largest producer in northern Iraq currently, Sepil said.

The Bina Bawi field has great potential, as does the Taq Taq field, where Genel is also active, Sepil said. “Currently OVM runs operations there, but with the acquisition we became the holder of the majority shares. Bina Bawi’s potential is equivalent to half a billion barrels, we believe. The capacity might even be higher.”

The company is also willing to take part in other regional projects, as it is already working a shorter-term project to take Taq Taq oil to the Kirkuk-Ceyhan line, the major pipe between Iraq and Turkey.



Former BP boss earns £12m from Iraqi oil venture

January 21, 2012 at 11:36 pm | Posted in Turkmens | Leave a comment
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Former BP boss earns £12m from Iraqi oil venture

Tony Hayward pockets first tranche of payments from Kurdistan oil venture with Genel Energy,             Friday 20 January 2012

BP Chief Executive Tony Hayward

Former BP chief Tony Hayward. Photograph: Suzanne Plunkett/Reuters

Former BP boss, Tony Hayward will pocket more than £12m in a first tranche of payouts less

than a year after he set up his own company and then bet on Kurdistan being the next big province

for the oil industry.

Hayward who left his old employers with a £10m pension pot after the Gulf of Mexico

blowout,  exercised his rights to a 6.67% stake in the Genel Energy business along with

 his partners Nat Rothschild and two other executives. The four Genel backers are entitled

to a windfall nudging £160m as they swap their “founder” shares in the Vallares investment

vehicle they established in return for ordinary shares in Genel. Hayward and the other

founders of Vallares will not be able to sell their shares until 21 November under a

lock-in arrangement.

The oil investors who had poured £100m of their money into the business could

win a further payout.

They still control ‘C’ class shares that entitle them to 15% of any gains should

Genel shares rise above a specified price.

A statement from Genel pointed out the initial investment was “risk capital”

that left them facing a loss of up to £20m had they not completed a successful

acquisition within a specified time frame.

Vallares is still sitting on nearly $2bn (£1.6bn) raised in an initial flotation last

year because the cash was not required to merge with the Turkish-based Genel,

the largest oil producer in the Kurdistan region of Iraq. Genel, with stakes in six

oilfields in northern Iraq says those interests amount to a potential 356m barrels

of proven oil reserves. Genel shares rose 1.2%to 855p still less than the £10 float price.

Oil Companies–Some Run by Former Bush Officials–Make a Risky Move Into Kurdistan

March 26, 2010 at 1:30 am | Posted in Turkmens | Leave a comment
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Oil Companies–Some Run by Former Bush Officials–Make a Risky Move Into Kurdistan

By Joshua Hammer


April 1, 2010

The Tawke oil field, just south of Iraq’s mountainous border with Turkey, is a bare, windblown patch of hills in one of the Middle East’s most isolated corners.

Three hundred miles north of Baghdad, it is also four hours by road from the nearest international airfield and hundreds of miles from the nearest seaport. But on April 12, 2005, more than 100 dignitaries from around the world trooped up to this bleak turf to observe a bit of history. One year earlier, a scrappy Norwegian oil company called DNO had become the first foreign business since the U.S. — led invasion of Iraq, in March 2003, to purchase oil-drilling rights in the Kurdistan region; defying skeptics, the Norwegians had shipped in millions of dollars’ worth of infrastructure and equipment, built an oil workers’ camp, and brought in technicians from the Philippines, India, and Scandinavia. Now DNO had invited Kurdish officials, local luminaries, and assorted friends of the region to witness the launch of the first exploratory oil well on Kurdish soil in two decades.

Continue Reading Oil Companies–Some Run by Former Bush Officials–Make a Risky Move Into Kurdistan…

Turkish energy giant to establish refinery in northern Iraq

January 27, 2010 at 2:20 pm | Posted in Turkmens | Leave a comment
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ISTANBUL – Milliyet
Monday, January 25, 2010

 A Turkish oil exploration and production company active in northern Iraq plans to establish a refinery with a capacity of 60,000 barrels this year in the city of Koya, near the Taq Taq oilfield.

 Genel Enerji, owned by Çukurova Holding, one of Turkey’s largest conglomerates with investments in the automotive, telecommunications, media, textile, energy and information-technology services sectors, is seeking loans for the refinery’s cost of $510 million.

  Continue Reading Turkish energy giant to establish refinery in northern Iraq…

The north of Iraq: an Oil and Gas Prize

May 20, 2009 at 10:30 pm | Posted in Turkmens | Leave a comment
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From The Times

May 20, 2009

Old enmities are put aside in fight for gas


Carl Mortished: World business briefing

 What do you get from an Austrian, a Hungarian, a Kurd and two Emiratis? If you believe in the deal signed at the weekend between OMV, the Austrian energy group, MOL, its Hungarian neighbour, the Sharjah-based Crescent Petroleum and Crescent’s affiliate Dana Gas, you get the most important energy project to come out of Iraq since the removal of Saddam Hussein.

With luck and a following political wind, the $8 billion (£5 billion) investment by Pearl Petroleum in Kurdish Iraq could be the most significant since the discovery of oil at Kirkuk by the Iraqi Petroleum Company in the 1930s.

 It could equally well be sunk by squabbling Baghdad politicians, dysfunctional ministers in Brussels and bellicose generals in Ankara.

 That would be a pity, because the Pearl partners have a plan to extract gas from Khor Mor and Chemchemal, two giant fields in Kurdish Iraq, and pipe it across the Turkish border. From there, the gas would be carried by Nabucco, an as-yet-unbuilt European Union flagship pipeline, into Central Europe.

 This may be the last chance for Nabucco, a project to bring Central Asian and Middle Eastern gas into Europe that has been on the drawing board for seven years.

 Last week, Gazprom, arch-foe of Nabucco, was trumpeting a deal with Eni, the Italian energy group, that would double the size of South Stream, a rival pipeline project that would bring Russian gas across the Black Sea and into the Balkans, avoiding troublesome transit through Ukraine.

 Until Sunday, Nabucco’s prospects seemed bleak. Backed by the former Bush Administration, as well as by Brussels, Nabucco has been a pipeline seeking a gasfield.

 One by one, initially enticing gas reserves in Central Asia vanished as geopolitics and geography intervened. Turkmenistan grew tired of talk about trans-Caspian pipelines and looked to China for an alternative customer.

 After years of debate and the sight of Russian tanks entering Georgia, Kazakhstan and Azerbaijan decided that discretion and Gazprom’s offer of a better gas price were better than valour and a speculative deal with Nabucco’s partners. Until Sunday, there was no other supplier bar Iran, still a bridge too far.

 Iraq’s gas reserves are unknown, but sure to be big. The old regime never bothered to develop its gas. There are small gas recovery projects in the south and Shell is toying with a plan to win gas from the Kirkuk oilfield.

 The Pearl partners reckon that their two fields alone could deliver three billion cubic feet a day into pipelines heading north, equal to a third of UK daily consumption. Swift to protest, the Oil Ministry in Baghdad denounced the deals, insisting that Kurdish Iraq could not export gas without central government consent.

 There is jealousy in Baghdad over the upstart Kurdish regional government’s success in developing an independent oil industry. Baghdad initially blustered over exploration licences for tiny foreign explorers in Kurdistan, arguing that the Kurds were giving away too much oil profit to foreigners.

 But a fortnight ago, Baghdad granted export licences for two Kurdish projects. Meanwhile, impatience with the failure of Iraq’s central government to bring oil output to even the levels before the 2003 invasion is turning to anger. A petition signed by 140 Iraqi MPs last week criticised the Oil Ministry.

 The mood is also changing in Ankara, where Turkish distrust of Kurds is giving way to realpolitik and business deals. Turkey’s Government wants stability in Iraq, but also aspires to the role of Europe’s eastern energy hub.

 In a future Iraq, without the iron glove of American security, the Kurdish region is an oil and gas prize, lonely, unprotected, bordered by a hostile Iran and a chaotic cauldron to the south and west. If not Turkey, who will protect Kurdistan?

 The Kurdish government last month assigned its option over a quarter of Tawke, an oilfield found by DNO, of Norway. It should be no surprise that the beneficiary was Genel Enerji, the Turkish oil group.

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