Genel ups stake in Kurdistan block, looks to Libya

Oil firm Genel Energy said it agreed to buy a controlling stake in a Kurdistan oil block for $94 million, upping its exposure to the semi-autonomous region of Iraq, as it also confirmed it was looking to Libya for new opportunities.

The company said it struck two deals to raise its stake in the Chia Surkh exploration block in Kurdistan to 80 percent from 20 percent, paying $68 million for a 40 percent stake and $26 million for a 20 percent stake from sellers Longford Energy and Petoil Petroleum.

"For what we consider a very good price, they (the deals) give us 80 per cent of a high-quality asset in one of the last great hydrocarbon provinces accessible to international investors," Genel's chief executive Tony Hayward said in a statement on Monday.

Kurdistan-focused Genel, which was established last year when the bid vehicle of former BP chief executive Tony Hayward bought Turkey's Genel Enerji, told an investor conference last week that it was also looking for acquisition opportunities in Libya.

The company also told the conference, hosted by Morgan Stanley, that it was not interested in acquiring other Kurdistan-focused players DNO or Gulf Keystone due to the high premiums which would be required to secure such deals.

Genel said it would fund the Chia Surkh acquisition from its cash reserves of $1.9 billion.

Chia Surkh is estimated to hold 305 million barrels of oil and gas resources.

Shares in Genel, which have lost almost a quarter of their value in the last three months, opened at 779 pence on Friday, valuing the firm at around 1.5 billion pounds ($2.3 billion).

(Source: Reuters)

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