Bloomberg News

Genel to Continue Iraq Oil Exports as Revenue to Exceed Plans

January 18, 2013

Genel Energy Plc (GENL), the largest oil producer in Iraq’s northern Kurdish region, said it will continue sending crude exports to Turkey and that revenue will exceed guidance.

The company will report sales of about $330 million for 2012, ahead of expectations for revenue of as much as $300 million, the company said in a statement in London today. The company’s production was 44,500 barrels of oil a day last year.

Chief Executive Officer Tony Hayward, the former BP Plc (BP/) CEO, this month started sending trucks of crude to Turkey after a dispute between the Kurdistan Regional Government and Iraq’s central government in Baghdad over tax revenue delayed export payments. Kurdish authorities will receive Turkish refined products in exchange and pay Genel, Hayward said last week.

“We are today exporting oil to Turkey in accordance with the authority granted to us by the Kurdistan Regional Government,” Hayward said in the statement. The company is “well placed to take advantage of regional opportunities for a broader export market as the political situation continues to develop.”

Genel shares rose 20 pence, or 2.6 percent, to 800 pence in London trading.

Export volumes to Turkey are currently “small” and will grow to about 20,000 barrels a day over the next six to eight weeks, the company said. The company received partial payment of $132 million on Dec. 3 for previous exports, it said.

Capital expenditure was $230 million last year, funded from cash flow from Kurdistan operations, it said. Expenditure this year will jump to $400 million to $500 million and the company has about $1 billion of cash on its books.

Genel plans to drill three wells in Kurdistan in the first half of 2013, targeting more than 750 million barrels.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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