Genel Energy will spend US$175 million to acquire a 23 per cent stake in the Bina Bawi exploration licence in Iraqi Kurdistan as it looks to expand its growing presence in the region
The Bina Bawi field covers an area of 246 sq-km to the east of Erbil and runs alongside the company’s major established oilfield Taq Taq where current potential output is 80,000 barrels a day and has been projected to rise to 200,000 barrels a day.
Genel chief executive officer Tony Hayward said, "What we are acquiring is very high-quality acreage in an area immediately adjacent to Taq Taq. The transaction fits neatly with our strategy of building our Kurdistan resource base through the steady, considered addition of promising acreage."
The acquisition of the licence stake would be made through the purchase of A&T Petroleum Company Ltd, current holders of the stake.
In the future Genel plans to link a pipeline to the region's main export pipeline from Kirkuk to Ceyhan.
Genel said two of the three wells drilled on the Bina Bawi block to date had encountered significant hydrocarbons.
"Our estimate is that the Bina Bawi discovery has contingent resources of some 500 million to 1 billion barrels of oil and oil equivalent, with some additional prospective upside," Hayward added.
The deal is subject to approval by the semi-autonomous Kurdistan Regional Government (KRG).
Genel Energy will hold a 23 per cent interest in the Bina Bawi production sharing contract, Austria–based OMV a 36 per cent operated interest and Prime Natural Resources a 21 per cent interest. The KRG will keep a 20 per cent working interest.
