Genel’s Hayward Expects Resolution to Kurdistan Oil Crisis
By John Lee.
Baghdad and Erbil both have too much at stake not to settle their dispute over oil, although they may take a year or so to do it, Genel Energy Chief Executive Tony Hayward (pictured) told Reuters.
“The scale of the opportunity for Kurdistan and for Iraq is so large that there will be a resolution,” said the former boss of BP.
“Over the next year or two, Kurdistan production capacity will grow towards 1 million barrels a day – that’s too much oil to be shut in as a consequence of a political dispute. So one way or another, it’s going to get resolved … We’d like to be exporting and believe strongly that over the next year or so, if not well before, that resolution will be arrived at.”
He added that if exports were to stop, production from its Taq Taq and Tawke oilfields would be sold on the domestic market.
That local business – which fetches about $60 a barrel, well below that on world markets – would be enough to keep both projects in the money.
Taq Taq is now pumping 105,000 bpd. Tawke is running at 70,000 bpd, but should be up to 100,000 bpd by the end of the year.
In the meantime, KRG energy minister Ashti Hawrami – aiming to reduce the region’s energy reliance on Baghdad – is carrying out plans to export oil and gas directly to Turkey, just to the north.
Hayward said the company could take on more opportunties in Iraqi Kurdistan, but acknowledged that options were now limited.
“If we see opportunities where we can create a lot of value, then we’ll continue to add, but there’s been a lot of consolidation in the course of the last nine months and the opportunity set is undoubtedly diminishing.”