BARCELONA, Spain – Genel Energy, the Anglo-Turkish exploration and production company, announced Thursday it expected a 50 percent increase in oil output this year in the Kurdistan Region of Iraq (KRI), saying it was optimistic that an oil row between Baghdad and Erbil would be resolved.
A “positive political momentum in the Kurdistan Region of Iraq has continued to build, and as we move into 2014 we do so with the prospect of sustainable pipeline exports to international markets bringing in predictable revenues at international prices,” the company said in comments attributed to its chairman.
Meanwhile, company CEO Tony Hayward said that, “The completion of the KRI oil pipeline has helped to create the platform for a 50 percent increase in production in 2014, with greater access to international pricing, while the signature of a gas sales agreement between the Kurdistan Regional Government (KRG) and the Turkish government provides the route to market for our very large KRI gas resource.”
The Kurdistan Regional Government (KRG) has said it hopes to increase crude shipments to 1 million barrels a day by the end of 2015 and 2 million barrels a day by 2020. In addition, it plans to export some 10 billion cubic meters of gas per year to Turkey by the end of 2016.
But Iraq’s Shiite-led government is locked in a serious quarrel with the Kurdistan Region, which backs its intention to begin large exports to Turkey by citing the constitution.
Baghdad insists that oil revenues from exports should be handled by its State Oil Marketing Organization; the Kurds want to handle export and revenues, with SOMO as an observer. In order to put pressure on the Kurds, Iraqi Prime Minister Nuri al-Maliki has cut the enclave from the national budget. Kurdistan Region President Massoud Barzani has called that tantamount to “a declaration of war.”
On Thursday, Barzani said the Kurds “cannot compromise” on their rights.
Hayward said that proven and contingent hydrocarbon reserves in Kurdistan were reappraised after new finds, yielding a further 1.5 billion barrels of oil equivalent (bnboe).
“We had success with all three exploration wells in the KRI and this, combined with positive appraisal results, increased proven, probable and contingent resources by 20 percent to 1.5 bnboe,” he said.
Genel Energy, the largest independent oil producer in Iraqi Kurdistan, said it expected “sustainable” Kurdish exports, through pipelines to Turkey, to international markets.
“The landmark Turkey-KRG Energy Agreement confirms that natural resources from Kurdistan will help provide energy hungry Turkey with the significant resources required to meet its energy needs,” Hayward said.
“The growth of our business reflects the KRI’s rapid emergence as not just a major oil producing region, but also as a very significant gas province,” he added.
