The Turkish oil firm Genel Enerji has announced that it has contacted JP Morgan Chase to sell part or all of its shares in the Taq Taq field in Kurdistan. Genel owns 44% of Taq Taq, and runs it in conjunction with China’s Sinopec. In January 2004 Genel signed a deal to operate in Kurdistan. It was later joined by Addax Petroleum of Switzerland, who later sold their portion of the field to Sinopec. From June to October 2009 Genel and Addax were allowed to export oil to Turkey until the deal between the Kurdistan Regional Government (KRG) and the Oil Ministry in Baghdad broke down over who would pay the companies. In 2010, there were talks between Baghdad and Kurdistan again over exports, but those have gone nowhere.
Many small to medium sized petroleum companies like Genel Enerji originally entered Kurdistan after the 2003 invasion hoping to strike oil, eventually start exporting, and perhaps turn that into a bigger deal with a multinational corporation. Those dreams have been unfulfilled as Baghdad called all the Kurdish deals illegal, and banned any company that works in the KRG from operating in the much larger southern oil fields. With the argument between the central and regional governments over petroleum not likely to end anytime soon, Genel may be regulated to exploration work and limited oil production with no big payoff in the end. That may be the reason why the company is interested in getting partially or totally out of Kurdistan.
SOURCES
Bloomberg, “Iraqi Kurds plan to double oil export capacity,” Hurriyet Daily News, 3/25/10
Ciszuk, Samuel, “No clarity on Iraq-KRG oil export flap,” Iraq Oil Report, 5/13/09
- “Taq-Taq aim is 180K bpd despite no export rights,” Iraq Oil Report, 3/25/09
Ebel, Robert, “Geopolitics and Energy in Iraq,” Center for Strategic and International Studies, August 2010
International Crisis Group, “Oil For Soil: Toward A Grand Bargain On Iraq And The Kurds,” 10/28/08
Lando, Ben, “DNO’s Iraq operations suspended,” Iraq Oil Report, 9/22/09
Reuters, “UPDATE 1-Iraqi Kurdistan suspends DNO’s oil operations,” 9/21/09
Stigset, Marianne, “DNO Chief Expects Increased Business in Iraq’s Kurdish Region,” Bloomberg, 8/18/10
Webb, Tim, “Oil giants find scramble for Iraq is a game with complex rules,” Observer, 10/19/08
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2 comments:
Great piece. What is the source for Genel approaching JP Morgan?
It's in the first link in the story. It comes from a report by Bloomberg.
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