Genel Energy Signs Deal to Develop Two Gas Fields in Kurdish Region

UK based Genel Energy on Thursday announced that it has reached an agreement with the Ministry of Natural Resources of the Kurdistan Regional Government (KRG) for the development of the Miran and Bina Bawi gas fields.

In addition, Genel has agreed key terms with OMV to acquire its 36% operated stake in the Bina Bawi gas field for $150 million in cash. An initial payment of $20 million will be paid on completion of the deal, with the remaining $130 million paid in two instalments after first gas, Genel said.

“These agreements represent a win-win in the commercialisation of Miran and Bina Bawi. It materially de-risks the value of Genel’s gas business, gives attractive project returns whilesignificantly lowering our capital exposure, and provides revenues from early oil production. For the KRG, it unlocks the Miran and Bina Bawi gas resource and will enable it to satisfy domestic gas demand and its obligations under the KRG-Turkey Gas Sales Agreement,” Tony Hayward, chief executive of Genel Energy, said.

The company expects that a final investment decision for the development of the fields will be made in the first half of 2015.

Genel’s current estimate of combined gross mean raw gas resources at Miran and Bina Bawi is 11.4 trillion cubic feet (tcf), which is expected to deliver gross mean sales gas of 8.4 tcf.