Latest news with #Genel
Observer
12-05-2025
- Business
- Observer
OQEP accelerates upstream investments and LNG growth in Q1
MUSCAT: OQ Exploration and Production (OQEP), one of Oman's leading oil and gas operators, has made strategic headway in expanding its upstream portfolio and diversifying energy assets during the first quarter of 2025, setting the stage for long-term production growth and low-carbon energy initiatives. With a robust portfolio of 14 upstream assets across the Sultanate of Oman — nine of which are producing — OQEP operates or partners in a range of concessions at various stages of development. The company's recent activities underscore its dual strategy of optimising oil and gas production while opening new frontiers for exploration and sustainable energy. UNLOCKING NEW INVESTMENT OPPORTUNITIESA key development in Q1 2025 was OQEP's collaboration with the Ministry of Energy and Minerals; and global investment bank Scotiabank to market Blocks 36, 43A and 66. These are part of a broader set of 11 blocks the Ministry plans to offer to investors through 2025–2026. OQEP's central role in this effort reinforces its position as a gateway for upstream investment into Oman's petroleum sector. In March, OQEP signed an Exploration and Production Sharing Agreement (EPSA) for Block 54 with the Ministry and London-listed Genel Energy. Under a joint operating agreement, OQEP will lead operations with a 60% stake, while Genel holds the remaining 40% as a non-operator. This marks Genel's first venture into Oman, lured by the country's stable regulatory environment. The Karawan Concession, spanning 5,632 km² in the South Oman Salt Basin, is underexplored but adjacent to productive fields. Both parties plan to invest up to $25 million in early-phase activities including seismic surveys and well testing over the next three years. ADVANCING EXPLORATION IN BLOCK 47Another significant milestone was the extension of Phase 1 exploration at Block 47, jointly operated with ENI Oman BV. The Najid-1 exploration well, spudded in February 2025, is expected to determine the commerciality of promising gas prospects. The six-month extension, agreed with the Ministry in April, will allow for deeper evaluation and, if successful, may lead to a second development phase. BOOSTING OIL OUTPUT FROM BLOCK 60OQEP also reported 86% progress in the Bisat C Expansion at Block 60 — its flagship oil asset, contributing 17% of the company's Q1 production. Once completed, the expansion will add 37,000 barrels per day (bpd) in oil processing capacity and 400,000 bpd in water treatment. Commissioning is targeted for Q3 2025, solidifying Block 60's role as a core revenue generator.
Rudaw Net
04-04-2025
- Business
- Rudaw Net
Court orders Genel Energy to pay KRG $26.8 million in costs
Also in Kurdistan Gorran's rival factions announce different dates for party congress Kurdish leaders urge compensation for Faili genocide survivors Cold weather, lack of rain devastate Kurdistan's wheat farmers NGO slams Kurdistan MPs for drawing salaries without parliament sitting A+ A- ERBIL, Kurdistan Region - Genel Energy said on Friday that an arbitration tribunal has ordered its subsidiary to pay nearly $27 million in legal costs to the Kurdistan Regional Government (KRG) in connection with a case about terminated contracts. The Genel subsidiary, Genel Energy Miran Bina Bawi Limited, was ordered by the London Court of International Arbitration to pay the KRG $26.8 million plus interest, the oil company said. The amount 'is less than the sum of approximately $36 million originally claimed by the KRG,' it added. The case began in 2021 when the KRG canceled Genel's contracts for the Bina Bawi and Miran gas fields arguing that the company had failed to develop the blocks as per the terms of their contract. The UK-listed company contested the termination and took the case to international arbitration. In December 2024, the court ruled in favour of the KRG. The two fields have large natural gas reserves. The Bina Bawi field holds an estimated 8.2 trillion cubic feet of natural gas and 37 million barrels of oil. Volume estimates at Miran are 6.6 trillion cubic feet of raw gas and 93 million barrels of oil and condensates. Genel Energy operates four fields in the Kurdistan Region – Taq Taq, Sarta, Tawke, and Peshkabir – with total reserves of some 117 million barrels of oil.
Iraq Business
19-03-2025
- Business
- Iraq Business
Genel Energy: Tawke delivering "Significant Cash Generation"
Genel Energy has announced its audited results for the year ended 31 December 2024. Paul Weir, Chief Executive of Genel, said: "In 2024, we demonstrated further progress on our journey of building towards delivering resilient, diversified cash flows. Our shift from cash outflow in 2023 to cash generation in 2024 has been important, and in 2025 we expect the cash generated by the Tawke PSC to continue to cover our costs. We are delighted to have established a footprint in the Sultanate of Oman, through our award of an interest in Block 54. This is the first step on our roadmap to diversification. "For 2025, we remain focussed on three principal objectives: maintenance of a strong balance sheet; resilient cash generation from the core business; and the addition of new assets. "For new assets, we will seek both to increase that footprint in Oman, and also acquire assets in other preferred jurisdictions that we have identified as attractive to Genel, with a focus on adding production assets that increase the cash generation and resilience of the business, and provide potential for further growth. "In the Kurdistan Region of Iraq ('KRI') we continue to work with our peers and the Regulator towards the restart of exports on the right terms to ensure our contracts are honoured and we are paid what we are due." Results summary ($ million unless stated) 2024 2023 Average Brent oil price ($/bbl) 81 82 Average realised price per barrel 35 47 Production (bopd, working interest) 19,650 12,410 Revenue 74.7 78.4 Production costs (17.6) (18.0) EBITDAX1 1.1 33.3 Operating loss (52.4) (10.3) Cash flow from operations 66.9 55.1 Capital expenditure 25.7 68.0 Free cash flow2 19.6 (71.0) Cash 195.6 363.4 Total debt 65.8 247.8 Net cash3 130.7 119.7 Basic LPS from continuing operations (¢ per share) (22.5) (6.1) EBITDAX is operating loss adjusted for the add back of depreciation and amortisation, exploration expense, net write-off/impairment of oil and gas assets and net ECL/reversal of ECL receivables Free cash flow is reconciled on page 8 Reported cash less IFRS debt is reconciled on page 8 Highlights Working interest average production increased by 58% to 19,650 bopd (2023: 12,410 bopd) All production sold into the domestic market at average $35/bbl consistent with prior year (2023: $47/bbl, which included export sales prices in Q1) Free cash flow of $20 million, compared to free cash outflow of $71 million last year Tawke free cash flow generation from domestic sales was over $70 million (2023: $28 million), benefiting from some offsetting and also positive working capital movements of around $30 million Organisation cost reductions were offset by non-repeating costs on arbitration, closing out unprofitable licences at Taq Taq and Sarta, and finalising exit from Qara Dagh Closing net cash of $131 million, an increase from $120 million at the start of the year Cash of $196 million (2023: $363 million), with bond debt reduced from $248 million at the start of the year to $66 million at year-end from buybacks and partial exercise of call option $107 million (under KBT pricing and excluding interest) remains overdue from the Kurdistan Regional Government ('KRG') to the Genel subsidiary Genel Energy International Limited ('GEIL') for sales made in previous years. The Company owes the KRG around $50 million. We continue to work towards a plan for payment or settlement of amounts owed, and appropriate adjustment for price and interest We were disappointed that in December 2024 the subsidiary, Genel Energy Miran Bina Bawi Limited ('GEMBBL'), lost the arbitration case brought against it by the KRG regarding the Miran and Bina Bawi gas assets. As previously announced, the KRG is seeking a costs award of over $36 million against GEMBBL Last week, the Company announced its award of an interest in Block 54 in the Sultanate of Oman. This new country entry is an important first step towards strategic diversification of our business Average portfolio carbon intensity again expected to be under 14 kgCO2e/bbl, remaining below the current target for industry average Climate rating: maintained a CDP Climate score of B for a third consecutive year OUTLOOK With domestic sales demand at similar levels to last year and year to date this year, the Company expects cash generation from the Tawke PSC to cover its organisational costs The Company continues to progress towards building a business with a strong balance sheet that delivers resilient, reliable, repeatable and diversified cash flows that supports a dividend programme. The Company objectives for the year on the path to building that business include: acquisition of new assets in Oman and other targeted jurisdiction to add reserves and diversify our cash generation restart of exports to access international pricing recovery of net amounts owed by the KRG further progress towards drilling Toosan-1 The Company has engaged Pareto Securities AS as Manager and Bookrunner to arrange fixed income investor meetings. Subject to market conditions and acceptable terms, a new senior unsecured bond issue with a tenor of five years may follow : CEO STATEMENT We start 2025 leaner and more efficient, and with all the building blocks necessary to establish a bigger and more successful business. Genel has a strong balance sheet and our producing fields within the Tawke PSC form a world-class asset that delivers significant cash generation even when selling at heavily discounted domestic prices because of the suspension of exports. This is a situation that we continue to work on closely with our peers and host government to resolve. Genel has a compact but highly skilled and motivated workforce, dedicated to executing our growth strategy and pursuing value accretive acquisitions that will diversify our geographical footprint within reliable and predictable jurisdictions. In 2024, we continued with the cost reduction exercise and business efficiency improvements that began in 2022. That process extended to continuing the divestment process for non-profitable assets. Taq Taq awaits only government approval before divestment is complete, and relinquishment of our other non-producing legacy assets in the Kurdistan Region of Iraq ('KRI') will also be completed soon. Having delivered these improvements and trimmed our debt levels to improve the capital efficiency of the business, it's time to move on to the next phase. We are very clear on what needs to be done to deliver the appropriate Company growth and deliver the shareholder returns that are necessary for an emerging market exploration and production business. The period of consolidation and efficiency improvement in 2024 must now give way to profitable growth. Genel is delighted to have taken the first step in its growth journey by signing an EPSA in the Sultanate of Oman with OQ Exploration & Production SAOG ('OQEP') as Operator, which will see us participate in the appraisal and development of Block 54. This will see Genel spend modestly over the next three years. The potential on the block is significant and while the eventual returns are not certain at this stage, we believe this move will lead to further exciting opportunities in the region. Oman is a jurisdiction that Genel has long considered as a very attractive place to do business and where we have been made very welcome by both our new partner and the regulator. Back in the KRI, together with our operating partner DNO, we have helped establish a reliable and consistent domestic sales market, which generates very important cash for producers there, albeit at a heavily discounted price. Tawke production currently realises only around $35/bbl, which is well below relevant reference benchmark oil prices. With our peers in the KRI, we continue to work with our host Government and Federal Iraqi authorities to negotiate an arrangement that allows the resumption of international oil sales at international oil prices and that provides appropriate returns for those producing the oil. This has proved to be a sporadic process, but most recent indicators suggest a solution should soon be found; a solution that could double Genel revenue immediately upon implementation. We have worked hard with DNO to ensure spend and delivery performance are optimised. The world-class field operating cost of only $4/bbl and consistent production delivery throughout 2024 are testament to the successful delivery performance of this asset. We have put behind us the disappointment of the outcome of the arbitration on the KRG's termination of the legacy Miran and Bina Bawi licences, where the London Court of International Arbitration ruled in favour of the KRG. We have a clear direction of travel and specific targets that we are pursuing to re-energise the business. Outlook The Company is focussed on delivering on three principal objectives: Strong balance sheet We will retain an appropriate balance that provides protection against outlook downside scenarios and maintain debt at a level that is appropriate for the cash generation of the business Resilient cash generation Realising the full potential of our existing portfolio which includes delivering performance from the Tawke licence, an asset with a long and profitable life ahead of it, and where many opportunities for further investment exist, if conditions permit. Continuing to work with our peers, the Kurdistan Regional Government ('KRG') and the Federal Government of Iraq ('FGI') to support the resumption of international oil sales from the KRI Investment in new cash flows Acquiring the right new assets to re-energise our portfolio and deliver diversified, increased, and more resilient cash generation that will enable us to re-establish a regular long-term dividend for our shareholders We are also focused on establishing the right conditions to support drilling the Toosan-1 exploration well in Somaliland OPERATING REVIEW Reserves and resources development Genel's proven plus probable (2P) net working interest reserves totalled 82 MMbbls (31 December 2023: 89 MMbbls) at the end of 2024. Remaining reserves (MMbbls) Resources (MMboe) Contingent Prospective 1P 2P 1C 2C Best Gross Net Gross Net Gross Net Gross Net Gross Net 31 December 2023 245 63 338 89 13 3 39 10 4,580 2,964 Production (29) (7) (29) (7) - - - - - - Acquisitions and disposals - - - - - - - - - - Extensions and discoveries - - - - - - - - - - New developments - - - - - - - - - - Revision of previous estimates - - - - - - - - 43 32 31 December 2024* 216 56 309 82 13 3 39 10 4,623 2,996 * Subject to final confirmation of Tawke PSC Reserves and Resources by the Operator Production Working interest average production of 19,650 bopd for the year, increased from 12,410 bopd in 2023. All Genel production in 2024 came from the Tawke PSC and was sold into the domestic market at average $35/bbl (2023: $47/bbl). PRODUCING ASSETS Tawke PSC (25% working interest) Gross production from the Tawke licence averaged 78,615 bopd in 2024 (2023: 46,280 bopd), a significant improvement that demonstrates the success in establishing consistent domestic market demand and the success of the asset to meet that demand. In 2024, the Tawke PSC generated over $70 million net cash flow for Genel, benefitting both from strong domestic sales, positive working capital movements and offsetting. Despite drilling no new wells this year, gross production from the Tawke PSC has been maintained at consistent levels. This has been achieved by careful and diligent subsurface and operations management. Three wells that were drilled last year, but not completed due to the closure of the pipeline, were brought onstream mid-year to meet demand from domestic traders. Production performance was further supported by an active well intervention programme. In partnership with DNO, Genel continues to be part of the first Associated Gas Injection (AGI) project in the Kurdistan Region of Iraq ('KRI'). Since its inception the project has saved approximately 2.3 million tonnes of CO2e from entering the atmosphere, with Tawke PSC carbon emissions below the industry average. Taq Taq (44% working interest, joint operator) We divested our 44% working interest in the Taq Taq production sharing contract to our joint venture partner. We have previously reported that Taq Taq had been on care and maintenance since May 2023 because the asset does not generate sufficient revenue at domestic sales prices to cover its operating costs. Furthermore, accessing the 10.3mmbbls of remaining net 2P reserves would require risking of further capital to drill new wells with uncertain outcomes - investment that ranks low on the Company's capital allocation priorities. The terms of the exit leave the Company with minimal residual financial obligations and potential liability exposures. The transaction is subject to Kurdistan Regional Government approval. PRE-PRODUCTION ASSETS Somaliland - SL10B13 (51% working interest, Operator) We continued to work with stakeholders towards the complete framework required to support drilling the Toosan-1 exploration well. This included optimisation of the well plan to reduce cost and maximise efficiency of the well delivery process and consideration of the appropriate equity level at which to be undertaking this activity. In the meantime, our in-country team continued to work closely with our local communities. Genel's Mobile Medical Clinic project in Somaliland, which provided vital medical care for some of the poorest people in Africa, launched phase two of the project in July, with a further 17,000 cases treated to take the total cases treated to more than 35,000. Somaliland - Odewayne (50% working interest, Operator) We continued to work with our partners to characterise the prospectivity of the block, with subsurface studies ongoing. We also continued to invest in the local communities, and in February 2024 delivered educational supplies to 1,000 primary and secondary school students across the block. Morocco (Lagzira block - 75% working interest, Operator) On the Lagzira block (75% working interest and operator), we are continuing the farmout process, seeking partners to test the Banasa Prospect, high graded, having been de-risked by 2024 seismic reprocessing. FINANCIAL REVIEW 2024 financial priorities The table below summarises our progress against the 2024 financial priorities of the Company as set out in our 2023 results. 2024 financial priorities Progress Maintain business resilience and balance sheet strength Developed a consistent dependable income stream through the domestic sales market Reduced cost and divested Taq Taq PSC (subject to KRG approval) Minimised cost of remediation on Sarta and Qara Dagh PSCs Reduced debt by $182 million, with associated decrease in interest cost Net cash of $131 million and cash of $196 million at end of 2024 Ensure capital availability for funding of key strategic objectives Maintained competitive bond market pricing, indicating availability of debt capital when needed Reduced cash levels through debt reduction to improve capital efficiency Ensure appropriate capital allocation Continued reduction in organisation to match needs of the business Deferred expenditure on non-cash generative projects Optimised processes and systems to improve operational efficiency Outlook and financial priorities for 2025 The key principles of our financial focus remain largely unchanged. We have a resilient business model that is designed to mitigate the impact of uncontrollable adverse events and maximise exposure to the upside. Ultimately, we seek to build a business that generates resilient, diverse and predictable cash flows that support resumption of distributions to shareholders. Full report here. (Source: Genel Energy)
Iraq Business
28-01-2025
- Business
- Iraq Business
Genel Energy Reports Strong Financials
Genel Energy issued the following trading and operations update in advance of the Company's full-year 2024 results, which are scheduled for release on 18 March 2025. The information contained herein has not been audited and may be subject to further review. Paul Weir, Chief Executive of Genel, said: " We start 2025 with a business that has all the building blocks necessary to grow and become more successful. Genel has a strong balance sheet, our two producing fields within the Tawke PSC form a world class asset that delivers significant cash generation, even when only selling at heavily discounted domestic prices. Genel has a compact, but highly skilled and motivated work force, dedicated to delivery performance, execution of a growth strategy and pursuit of value accretive acquisitions that will geographically diversify us into reliable and predictable jurisdictions. "We continue to work with peers and our host government to push for the conditions necessary to enable testing of any new mechanism for exports. We note the recent discussions of a revised budget law in Iraq that would provide the framework for a mechanism to fund the payment of IOCs by the KRG on resumption of exports. "Consistent strong delivery performance at Tawke saw us complete another year of robust production and deliver full year free cash flow of $19 million and an improvement in our net cash position to $131 million. "We are very clear on what needs to be done to deliver on our strategy, add new assets and build a business that delivers consistent value to its shareholders. The period of our work focused on consolidation and efficiency improvement in 2024 has laid the foundations for profitable future growth. " 2024 FINANCIAL PERFORMANCE Working interest average production of 19,650 bopd for the year, increased from 12,410 bopd in 2023 All production sold into the domestic market at average $35/bbl (2023: $35/bbl) Closing out and finalising terms of exit from Taq Taq at minimal cost. Free cash flow of $19 million, compared to free cash out flow of $71 million last year Balance sheet at 31 December 2024 Total debt has been reduced from $248 million at the start of the year to current $66 million Cash of $195 million (2023: $363 million) Net cash of $131 million, an increase from $120 million at the start of the year Receivables $107 million (under KBT pricing and excluding interest) remains overdue from the Kurdistan Regional Government ('KRG'), although this is reduced by amounts owed to the KRG, which are currently around $50 million We continue to work towards a plan for payment or settlement of amounts owed, and appropriate adjustment for price and interest Arbitration In December 2024 our subsidiary, Genel Energy Miran Bina Bawi Limited, lost the arbitration case brought against it by the KRG regarding the KRG's right to terminate the Miran and Bina Bawi Production Sharing Contracts Due to the extremely limited grounds of appeal against an LCIA Arbitration Award, no appeal has been made by Genel Energy Miran Bina Bawi Limited and the deadline for appeal has passed The process under which the Tribunal determines the costs award to be made against Genel Energy Miran Bina Bawi Limited is now underway. The first stage of that process was for the KRG to submit its claim for costs incurred to the Tribunal. The KRG is claiming circa $36 million for costs incurred to the end of November 2024. This is materially higher than all the costs incurred by Genel Energy Miran Bina Bawi Limited throughout all stages of the arbitration process which was commenced by the KRG in 2021 The next stage of the process gives Genel Energy Miran Bina Bawi Limited the opportunity to make submissions to the Tribunal to challenge robustly the quantum of the KRG's cost claim, with a view to the final costs award being made for costs that are reasonably incurred, proportionate and also necessary KURDISTAN: TAWKE PSC ACTIVITY AND PRODUCTION Q4 Gross production of 74,140 bopd (Q3 2024: 84,210 bopd) sold domestically at average $34/bbl (Q3 2024: $37/bbl), with average production for the year 78,615 bopd (H1 2024: 78,050 bopd) Working interest production of 18,540 bopd in Q4 2024 (21,050 bopd in Q3 2024) Three wells that were drilled in 2023 but not completed due to the closure of the Iraq-Türkiye Pipeline, were brought onstream midyear contributing 7,800 bopd to gross production, with further production added from well interventions work. Discussions with the Regulator around the work programme for 2025 are ongoing AFRICA EXPLORATION On SL10B13 in Somaliland, we continue to work towards achieving conditions that support drilling of the highly prospective Toosan-1 exploration well On Lagzira in Morocco, we are running a farmout process seeking partners to test the newly high graded Banasa Prospect, which has been de-risked by 2024 seismic reprocessing LEGACY KURDISTAN LICENCES Over the last two years we have taken steps to stop spend that does not represent good investment and we have begun the divestment or relinquishment of unprofitable assets We are pleased to confirm that we have agreed terms for divestment of the Taq Taq PSC, which will remove the risk of any residual decommissioning liabilities. This divestment is now subject to KRG approval ESG Emissions reduction: in partnership with DNO, Genel continues to be part of the first Associated Gas Injection (AGI) project in the KRI. CDP Climate risk score of B for three consecutive years Genel's Mobile Medical Clinic project in Somaliland, which provides vital medical care for some of the poorest people in Africa, launched phase two of the project in July, with a further 15,000 cases treated to take the total cases treated to more than 30,000 OUTLOOK With Tawke domestic sales demand in 2025 expected to continue at similar levels to 2024, the Company expects its cash generation to cover its organisational costs - we will provide an update on Tawke activity and investment plans at our full year results in March We continue to work towards a payment plan for recovery of overdue receivables The Company continues to progress towards building a business with a strong balance sheet that delivers resilient, reliable, repeatable and diversified cash flows that supports a dividend programme. The Company objectives for the year on the path to building that business include: acquisition of new assets to add reserves and diversify our cash generation restart of exports to access international pricing recovery of net amounts owed by the KRG further progress towards drilling Toosan-1 farm-out of Lagzira (Source: Genel Energy) Tags: cg, featured, Genel Energy, Kurdistan News, Taq Taq, Tawke
