Genel Energy plans North Africa expansion
London, August 23, 2012
London-listed oil explorer Genel Energy announced deals that will help it to diversify into the Mediterranean and North Africa on Thursday, building on its strategy to expand outside its core region of Kurdistan.
Genel said it would acquire 75 percent of Mediterranean Oil & Gas's interests in an offshore Malta contract for up to $30 million, with an additional agreement to assess and acquire further assets in Malta, Libya and Tunisia.
It also said it would farm in to 60 percent and assume ownership of the Sidi Moussa block offshore Morocco for up to $50 million.
Although the acquisitions are small, they mark the first foray for Genel into the region. The majority of its acreage is in the semi-autonomous Kurdistan region of Iraq, and it also has assets in Somaliland and Cote d'Ivoire.
Genel was formed last year when former BP Chief Executive Tony Hayward and financier Nathaniel Rothschild's bid vehicle bought Turkey's Genel Enerji.
Hayward, now Genel CEO, has said that the company wanted to diversify and that its Turkish background lent it a natural advantage in the North African region.
On Tuesday, it splashed out around $450 million on part of Heritage Oil's stake in a gas discovery in Kurdistan.
Thursday's deals were announced alongside Genel's results for the six months to end-June. It ended the period with a net cash pile of $1.8 billion and said it had earmarked around $1 billion to buy further assets.
With revenues for the first half of $123 million, it retained its guidance for full year sales of $250 million to $300 million.
Average production of 40,000 barrels of oil per day was still expected, it said, though that could rise if it is able to continue exporting from Kurdistan throughout 2012.
Crude oil exports from Kurdistan were halted in April due to a payment dispute between Iraq's central government and the autonomous northern region, but resumed at the beginning of August. - Reuters