Somaliland – The Balancing of Geological Potential and Political Risk by Genel

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Interview with Tony Hayward

By James Stafford |Tony Hayward

Somalilandsun – From Kurdistan to Somaliland, for independent oil companies, getting your hands on new exploration acreage where both technical risk and political risk are low is impossible. Exploring for oil and gas in new frontiers is all about striking the right balance between geological potential and political risk.

Take it from Anglo-Turkish Genel Energy, the largest producer in the Kurdistan Region of Iraq (KRI), where it seems nothing can shake investor confidence right now.

In an exclusive interview with Oilprice.com, former BP chief and current CEO of Genel Energy, Tony Hayward, discusses:

Oilprice.com: On 29 September, a series of attacks targeting security forces in the Kurdish capital of Erbil killed six, sparking fears that the conflict in Syria maybe be spreading Kurdistan. Will this do anything to investor confidence in the region?

Tony Hayward: Kurdistan has been a beacon of stability and security in an unstable region, but sadly nowhere is immune to terrorism. As this is the first such incident in Kurdistan for six years, we have no reason to think that it will or should change investor perception.

Oilprice.com: Right now, Kurdistan is one of the hottest emerging venues out there, and the media is fascinated with the Kurds’ success in forging oil and gas independence despite threats emanating from Baghdad. As the largest oil producer in Kurdistan, Genel naturally fields the majority of tricky questions related to these political dynamics. Is there anything that can stop Kurdistan from continuing to pursue oil independence at this point?

Tony Hayward: The impending completion of the pipeline is clearly a significant milestone for the oil industry in the Kurdistan Region of Iraq. The relationship between the KRI and Turkey is now very strong, and this has helped the Kurdistan Regional Government to take control of its own exports. The strength of this relationship has helped to give significant momentum to the Kurdistan oil and gas industry.

The signing of an Energy Framework Agreement between Turkey and the KRG in March 2013 was an important step, and we have seen clear evidence of its implementation – KRI crude oil is exported by truck to international markets via Turkey, and a Turkish state-backed energy company has also entered the upstream sector in the KRI, signing 6 PSCs with the KRG and partnering with Exxon in a number of licences. Finally, Turkey and the KRG have agreed a framework for the export of KRI gas to the Turkish gas market – we expect this Gas Sales Agreement to be signed by the end of the year.

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To find out more about Genel Energy and their developments please visit www.genelenergy.com

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