Genel Energy will resume drilling work at the Taq Taq oilfield in Kurdistan Region of Iraq (KRI) in coming weeks to ramp up production, according to the company
The chief financial officer Ben Monaghan told Reuters that the restart of drilling work will mark the first time in more than a year that Genel Energy has drilled in the region to increase output from its fields after the Kurdistan Regional Government (KRG) struggled to pay producers for oil exports. “It’s a symbolic restart of our investments.”
The Taq Taq oilfield has gross reserves of 541mn barrels of oil, according to Genel Energy’s website.
Genel Energy also mentioned in January that it would invest US$80mn to US$120mn this year in KRI, depending on export payments.
The oil producer is still owed more than US$400mn by the KRG for oil exports, Monaghan added. The push for more production comes despite a roughly 40 per cent fall in oil prices over the past year to around US$30 a barrel.
The autonomous KRG had announced last month that it would start paying oil producers according to the terms of their contracts, on top of a percentage of monthly netback revenue derived from each field to help them recover costs.
The new payment mechanism means that, although outright payments will fall, oil producers will have a more predictable outlook over their monthly oil export payments and the KRG will gradually clear its oil export debt.
The KRG had been making ad hoc monthly payments since September 2015 to help oil companies meet their running costs.
