After all the travails he has had to endure as a result of his ill-fated Bumi coal-mining venture with Indonesia's controversial Bakrie family, Nat Rothschild can at least take solace from the contrasting fortunes of Genel Energy (GENL) - a frontier oil & gas explorer that came into being in 2011 as a result of the reverse acquisition of Turkey's Genel Enerji by the Vallares investment vehicle set up by Rothschild, former BP chief Tony Hayward and former Goldman Sachs high-flyer Julian Metherell.
After a succession of positive exploration updates, the principal focus of the market is now on the Anglo-Turkish explorer's highly promising asset base in Kurdistan. Last month, Genel's share price surged on news that it had delivered a test rate of 11,950 barrels of oil per day (bopd) from the first of the five exploration wells in the Chia Surkh discovery area. A second test at the same Chia Surkh 10 well has produced a sustained preliminary flow rate of 3,200 bopd and 8.4m cubic feet of natural gas (cfg). Genel's prospects were also boosted by news that Australian explorer Oil Search (in tandem with French major Total SA) has achieved an initial flow rate of 400-500 bopd of 'sweet' crude at its Taza-1 well, in addition to 1m cubic feet of gas. This new find is located just to the east of the Miran field, which is fully owned and operated by Genel.
While there have been no shortage of plus points on the operational front, Genel's continued success in the region - along with that of other western operators - continues to attract the ire of Iraqi authorities. And this could become even more acute if recent reports suggesting that a landmark supply agreement turn out to be true. The speculation was precipitated by recent high-level talks between Turkey's Prime Minister Recep Tayyip Erdogan and his opposite number in Kurdistan, Nechirvan Barzani. Baghdad has repeatedly warned the Kurds not to sign separate energy accords with western oil companies. But rumours have emerged that Turkey may also take the Kurdistan Regional Government's (KRG) stake in concessions operated by ExxonMobil. The KRG has been shipping oil by trucks to Turkey in defiance of Baghdad, and a formalised agreement would up the ante.
