Turkey-Genel gas update

In 2013, Turkey established Turkish Energy Company (“TEC”) as a vehicle to enter into partnerships with IOCs for dealings in Kurdistan. TEC was a state-backed entity and an offshoot of Turkish Petroleum International Company (“TPIC”).

Earlier this year TEC was placed under BOTAS, the state-owned oil and gas pipelines and trading company, with gas coming back to one of the top items on the agenda of the Turkish government. It is now commanding attention at the highest levels of government, driven by a strong will to secure Kurdish gas to strengthen its hand against Russia.

To this end, TEC and Genel have been in continuing dialogue over the way forward for the Miran and Bina Bawi gas fields, with the talks intensifying in recent months. For Turkey, the interest in the project is strategic and necessary. For Genel, the securing of Turkey as a guaranteed long term offtaker is important in helping in reviving the company’s fortunes following a succession of problems including reserve write downs and production underperformance.This has been compounded by a series of management changes with Tony Hayward and Nat Rothschild leaving the board in June 2017 and the departure of Ben Monaghan on 30 June 2017.

Genel is now craving some stability with focus turning to delivery of the gas project which will take a few years to develop. In the meantime, managing production at Taq Taq remains a near term priority.

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• Kurdistan independence referendum
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