Genel Energy Interested in Acquiring DNO

Source: Reuters 11/13/2011, Location: Middle East

Genel Energy group sees Norway's DNO as a "natural partner" as it seeks to acquire assets, but the company is not in detailed talks with anyone as it completes its own merger, a Genel executive said. Genel Energy, formed by the combination of Vallares Plc and Turkey's Genel Enerji, has made no secret of its plans to make acquisitions with its $2.2 billion in cash.

"DNO is our natural partner so it makes a lot of sense if we can take them into Genel," Mehmet Sepil, CEO of Genel Enerji, told Reuters on the sidelines of an oil and gas conference in Arbil, the capital of Iraqi Kurdistan.

Former BP chief executive Tony Hayward said earlier on Sunday that he expected the Genel merger to be completed around Nov. 21.

Sepil said he would remain with the new company but would not be involved in the day-to-day management. "We have to finalise this merger process," Sepil said. "We are interested in a few companies, (but there are) no detailed talks at this point."

"I'm sure in the next few months you'll see a lot of announcements coming from us," he said.

Hayward told a Norwegian newspaper in late October he was interested in buying DNO and its Kurdish oil licences. DNO chief executive Helge Eide said last week that the company was ready to pursue its own acquisitions as it integrates the Gulf assets of Dubai-based RAK Petroleum. DNO is producing 50,000 barrels per day of crude at its Tawke field in Iraq's northern Kurdish region and will boost output capacity to 100,000 bpd next year, Eide told Reuters at the conference.

DNO's stock surged 20 percent on reports that Exxon Mobil had completed a deal with the Kurdistan Regional Government for six exploration blocs. A KRG official confirmed the Exxon deal.

Exxon's entry into the Kurdish region was seen as a sign that DNO's production-sharing deals with the Kurdish government could be approved. Iraq's central government considers such deals illegal.

"The Exxon story was probably great news for everybody but not for us," Sepil said. "I really wished they had come six months later."

Hayward said Genel Energy is planning to build a $400 million oil pipeline to link its Tak Tak oilfield with Iraq's export pipeline to Turkey's Mediterranean port of Ceyhan.

The company hopes to start construction on the 400,000-barrel-per-day pipeline in the spring and finish by the second half of 2013, Hayward said.

"We are planning to build a pipeline from Tak Tak to Faysh Khabour, which is the up station in the northern part of Kurdistan immediately this side of the border with Turkey, and it's tying in to the major export line with Ceyhan," Hayward said in Arbil. Faysh Khabour is located in northwestern Iraq near the border with Syria and Turkey.

"We've completed the engineering on it and are currently in the market to identify an EPC (engineering, procurement and construction) contractor," Hayward said.


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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