Genel Energy (LON:GENL) has agreed to sell its partner in the Chia Surkh project, Petoil, a 20% stake in the Kurdistan based project.
Petoil, in return, will cover Genel’s share of costs for an appraisal well which is planned for the first quarter of 2016. It is expected that the well will cost a total of US$50mln.
The well aims to refine estimates of the field’s size. Contingent resources are currently estimated at 250mln barrels oil equivalent.
Following the transaction, Genel will own 40% of the Chia Surkh production sharing contract and Petoil will have 40%. The Kurdistan Regional Government, meanwhile, is a 20% stakegholder.
The transaction is subject to approval from the KRG.
Assuming it goes ahead, Petoil will transfer US$10mln to Genel as security and Petoil will become the project’s operator.