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Published On: Tue, Dec 16th, 2014

Genel Energy has High Hopes in exploring Oil in Somaliland

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genel billion dollar 1The head of Genel Energy, one of the largest oil and gas companies operating in northern Iraq, said his company has discovered two gas reservoirs in the region with a potential volume of 12 to 20 trillion cubic meters — about half the size of Azerbaijan’s largest gas field, Shah-Deniz. Tony Hayward, who was the chief executive of oil at British Petroleum during the Deep Water Horizon spill, said the Kurdish gas will be carried to the Turkish market by 2025.

 

“This makes really big money for the KRG,” Hayward told Turkey’s Hurriyet Daily News. Hayward’s remarks come one week after his company signed a gas development deal with the Kurdish Regional Government (KRG).

 

The KRG still owes Genel Energy about $150 million for its oil exports at the end of September. Earlier this month, the KRG announced that production surged and that it would be able to make payments to exporters in the near future.

 

Over the last several weeks, the Kurdish government has taken steps to legitimize its oil exports.

 

Baghdad and the KRG reached an accord last week that eased tensions over oil exports and budget payments. The central government in Iraq transferred to the autonomous region of Iraqi Kurdistan $500 million, paving the way for the possibility of a lasting settlement and inter-governmental cooperation to fight the Islamic State group.

 

For the past six months Iraqi Kurdistan has been exporting oil via a pipeline that runs through Turkey to the Mediterranean port of Ceyhan, without the consent of the Baghdad government, which is required by law. Iraqi Oil Report wrote that the Kurdistan Regional Government is pumping about 120,000 barrels a day from two fields in the Kirkuk region. Dozens of tankers have picked up some of that oil in Ceyhan. So far, it is not clear if any of those tankers have offloaded oil to buyers.

 

About Somaliland potential oil.

 

Oilprice.com: Genel is no stranger to high-risk venues, and that brings us to Somaliland. What’s the political risk of exploring in a country that broke away from Somalia 20 years ago but still is not recognized internationally?

 

Tony Hayward: As an independent oil company I’m afraid the potential for now finding acreage with a very low technical and political risk is nigh on impossible – you have to have one or the other. Kurdistan was a low technical risk, and we were happy with the level of political risk – and we believe the momentum over the last 18 months has proven us correct.

 

Somaliland is geologically hugely exciting, and so the risk is on the political side.

 

Oilprice.com: Why Somaliland? How explored is Somaliland, and what do you expect to find—and when?

 

Tony Hayward: Somaliland looks analogous with the prolific Yemen Rift Basins – geologically it looks exceptional, and it is a very underexplored area.

 

Oilprice.com: What other areas are worth exploring in terms of geological analogy to the prolific Jurassic Rift Basins of Yemen?

 

Tony Hayward: We like Ethiopia, hence our decision to farm in to the Adigala Block last month. The Block borders Somaliland, and oil seeps and surface outcrops support the presence of a mature and active Jurassic oil prone system, which we believe is analogous to the Yemen basins. We have identified several large potential structures, with further planned seismic and technical work to be done to identify these leads into drill ready prospects. We are also actively reviewing other opportunities in the region.

 

Oilprice.com: Where do you predict the next big find to be in this area, and why?

 

Tony Hayward: Hopefully in our acreage! We like the geology and we are excited about the prospects, but if we could predict the next big find then we would be in a very blessed position indeed. The only way to ascertain whether hydrocarbons are present in commercial quantities is to drill.

 

Oilprice.com: What attracted you to Malta and Morocco? What are your expectations?

 

Tony Hayward: As with all of our acreage – geology. As we have expanded outside Africa we have targeted opportunities to take material interests in high impact prospects, with the potential for field sizes of at least 250 million bbls. Malta and Morocco both fall firmly in these categories and, while expectations are dangerous in this business, we are confident in the geology and look forward to drilling them both. Morocco will be our first well to spud outside the KRI when it does so in the last quarter of this year.

 

Oilprice.com: How excited should investors be at the continued prospects for offshore Cote d’Ivoire due to the fact that it is the same basin where Western Ghana’s Jubilee field was discovered?

 

Tony Hayward: Our prospect is in the same sub basin as the West Coast of Ghana, and the discovery rate there has been 44%. There are clearly proven petroleum systems in the area and there are geological similarities – if the result is the same we will be delighted.

 

To find out more about Genel Energy and their developments please visit www.genelenergy.com

Abdirahman Bidhan Dahir

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