Genel, one of the companies whose operations feed a controversial oil export pipeline out of the semi-autonomous region of Iraq, this morning revealed it is due US$40mln of revenue from oil export sales.
That is on top of the US$192mln of revenues it generated during the first half of this year principally from domestic sales. This represents a 20% increase compared to the corresponding period of 2013.
First half earnings increased 6% to US$138mln, the company revealed.
Genel said it achieved significant production growth during the period with average net production rising 50% against last year’s comparative to 63,000 barrels oil equivalent per day.
The company also highlighted progress towards sustainable exports via Kurdistan’s pipeline into Turkey, confirming that the first cargo was lifted from Ceyhan in May.
The company said that revenue from the first export sale, totalling around US$40mln, was not recognised during the financial reporting period.
And it explained that proceeds from the first sale of exported oil were received into a Turkish bank account controlled by Kurdistan’s regional government.
Genel chief executive Tony Hayward said: "Operational momentum in the Kurdistan Region of Iraq (KRI) is increasing, with the opening of the KRI-Turkey pipeline resulting in a significant rise in our production.
“Whilst we continue to monitor the situation closely, our operations in Kurdistan have been unaffected by events elsewhere in Iraq.
“The KRG has successfully sold oil exported through Ceyhan at international prices, and we expect our production to increase further in the second half of the year as sales become regular and payments predictable.”
Following the first export sale, subsequent crude deliveries have been at the centre of a contentious stand-off.
Iraq views the exports as illegal and has made attempts to block international sales.
One tanker carrying crude produced in Kurdistan was tracked across the globe, and its presence off the Texas port of Galveston led to legal action in US courts as Baghdad attempted to have the shipment seized.
Separately, at the end of last week, it was reported that a second tanker had been unloaded in the South China Sea onto two other vessels. A third tanker loaded from Ceyhan is believed to be anchored off the Moroccan coast.
Genel and the regional government, meanwhile, have been negotiating the terms of a gas sales agreement which would unlock production from the company’s Miran and Bina Bawi gas fields.
An agreement is expected by the year’s end.
In the meantime, Genel continues efforts to diversify via exploration with drilling underway offshore Morocco and Angola – results are due for the respective programmes in the coming months.
Hayward expects Genel to make material progress in the second half of the year, via the anticipated gas sales deal in Kurdistan and the potentially high impact drill programmes.
“The signing of the gas sales off-take agreement for Miran and Bina Bawi will be transformational for our gas business, and will provide a clear path to monetisation of this world-class resource,” He said.
Genel left unchanged its guidance for production, revenue and capex – at 60,000 to 70,000 barrels, US$500mln to US$600mln, and US$550mln to US$600mln respectively.