Russian Foreign Minister Sergey Lavrov has said that Moscow is very interested in increasing trade, economic and investment ties with Iraq.
Following a meeting on Wednesday with Iraqi Foreign Minister Mohamed Ali Alhakim, he said:
“In the field of investment, especially in the hydrocarbon sector, there is a very good result. Lukoil, Gazprom Neft, SoyuzNefteGaz are already working, Rosneft is interested in projects in Iraq. The total investment in this industry has already exceeded $ 10 billion.
“We want to promote projects in other areas. Today we talked about electricity, agriculture, industry, transport – all this will be considered in the context of preparations for the next meeting of the Russian-Iraqi Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation.“
He added that about 4 thousand Iraqi citizens are currently studying in universities of the Russian Federation, while dozens of diplomats from Iraq take part in special training courses at the Diplomatic Academy at the Russian Foreign Ministry.
A new UK aid package is to help the Government of Iraq to reinvigorate its economy and rebuild hospitals, schools and other vital infrastructure, allowing Iraqis displaced by conflict to return home and restart their lives, UK Minister for the Middle East Alistair Burt announced during a four-day visit to Iraq.
The UK is the first donor to the newly formed Iraq Reform and Reconstruction Fund (IRRF), following close cooperation between the Department for International Development (DFID), the Government of Iraq, the World Bank, Germany and other international partners to develop the fund.
The fund will:
encourage innovative approaches and provide technical assistance to the Government of Iraq as it reconstructs areas affected by conflict, including the rebuilding of houses, schools, hospitals, factories and roads.
provide opportunities to utilise UK and international expertise to help the Government of Iraq to carry out vital reforms that will make the country more business friendly.
help unlock Iraq’s economic potential, generate jobs, boost potential for enhanced future trade with the UK and other international partners and lay the ground-work for long-term peace and stability following the conflict with Daesh.
In addition to tackling Iraq’s long-term recovery and reconstruction, Mr. Burt also announced further support to help meet the immediate humanitarian needs of the 1.8 million people still displaced from their homes within Iraq, and a boost for stabilisation efforts to ensure vital services such as healthcare and electricity are reinstated quickly in places such as Mosul.
During the visit in which Iraq and the UK agreed to a joint communique to further strengthen bilateral relations, Mr Burt held wide ranging discussions on UK-Iraqi cooperation, trade, development and regional security issues with the Iraqi President Barham Salih, the Prime Minister Adil Abdul Mehdi, Foreign Minister, Deputy Foreign Minister and the Trade and Planning ministers.
He also met Prime Minister of the Kurdistan Regional Government, Nechirvan Barzani, and the Prime-Minister designate, Masrour Barzani. Whilst in the Kurdistan Region, the minister also met Minister for the Interior, and for Peshmerga Affairs Karim Sinjari, as well as Deputy Prime Minister Qubad Talabani.
In support of the Foreign Secretary’s commitment to tackle the persecution of Christians across the globe, the minister also engaged with the Archbishop of Erbil, Bashar Warda and grassroots faith organisations to gain their perspectives on freedom of religion and beliefs in the region.
Speaking from Baghdad the Minister for the Middle East Alistair Burt said:
“The UK is a strong partner and friend of Iraq. We share a range of mutual and growing priorities which include security, development, foreign policy and trade.
“There is much to be celebrated about Iraq’s progress since the territorial defeat of Daesh in 2017. But there is more to be done to help Iraq develop the strong, stable future, decided on by all Iraqis, that its people deserve. The UK remains committed to supporting Iraq to develop along non-sectarian lines, and we are particularly concerned about the rights and freedoms afforded to Christians and other minority faith groups.
“I am proud that we will be the first donor to the Iraq Reform and Reconstruction Fund. UK aid will provide vital support to the people of Iraq as they rebuild their lives, their businesses and their economic independence.“
UK aid announced today for the humanitarian response will support vulnerable people displaced by conflict, providing clean water, medicine and shelter. Since 2014, UK aid in Iraq has provided 4.1 million people with life-saving healthcare, 2 million people with safe water and sanitation, 836,500 people with shelter and more than 408,000 people with food.
£16 million will be allocated to the Iraq Reform and Reconstruction Fund (IRRF), run by the World Bank, from DFID’s budget. The IRRF will support Government of Iraq-led reconstruction efforts following the destruction caused by the conflict with Daesh, and support the implementation of longer term economic reform.
£6.9 million will be allocated to UNDP’s Funding Facility for Stabilisation (FFS) in Iraq from the UK Government’s Conflict, Security and Stability Fund (CSSF). It will directly support the rehabilitation of critical infrastructure in areas of Iraq liberated from Daesh. This will include hospitals, school, power plants and roads destroyed in the fighting.
£10 million will be allocated to UN OCHA’s Iraq Humanitarian Pooled Fund from DFID’s budget. It will support the ongoing humanitarian response, providing for the immediate needs of vulnerable people in Iraq displaced by conflict. It will help deliver clean water, medicine, shelter and a wide range of additional services to people living within temporary camps. Since 2014, UK aid in Iraq has provided 4.1 million people with life-saving healthcare, 2 million people with safe water and sanitation, 836,500 people with shelter and more than 408,000 people with food.
By Osama Al Sharif for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
Jordan’s King Abdullah’s one-day visit to Baghdad on Jan. 14 was hailed as “historic” by Iraqi President Barham Saleh. It was the first trip to Iraq by the Jordanian monarch in more than a decade, and it came less than a month after the kingdom’s prime minister, Omar Razzaz, paid a visit on Dec. 28 to the Iraqi capital to sign a number of economic agreements.
A royal court statement said the king noted the strong ties between the two countries, affirming that Jordan stands by Iraq as it seeks to safeguard its security and stability, and works to fulfill the aspirations of the Iraqi people toward further prosperity and progress.
It added that the two leaders “stressed the importance of bilateral agreements in the economic, trade, investment, energy, transport and construction sectors.”
Iraq’s Ministry of Oil has announced final oil exports for December of 115,517,974 barrels, giving an average for the month of 3.726 million barrels per day (bpd), a increase from the 3.377 bpd exported in November.
These exports from the oilfields in central and southern Iraq amounted to 112,450,367 barrels, while exports by the North Oil Company amounted to 3,067,607 barrels.
Revenues for the month were $6.234 billion at an average price of $53.962 per barrel.
World Health Organization (WHO) Iraq delivers four trucks loaded with kits and medical supplies to Diyala
Responding to the need of the Directorate of Health in Diyala, WHO with the support of the generous donors, has arranged for a large consignment of medical kits and medical supplies to support the Directorate.
A shipment of four 40-feet trucks of kits and medical supplies was transported on 14 January 2019 to support returnees’ districts in Diyala governorate, 84 kilometers east of Baghdad.
As Diyala is one of the crisis affected governorate and in line with the objectives of Humanitarian Response Plan, WHO, in coordination with Diyala health directorate, developed an action plan to support the returnees and the IDPs families in the governorate during 2019.
“This shipment is the first of its kind that was delivered to Diyala and an important step of WHO’s intervention in the governorate as part of 2019 plan,” Said Dr. Adham Ismail, Acting Representative of WHO Iraq. Dr. Ali Hussain al-Temimi, Director General of Diyala DoH pointed out that the shipment would save the lives of population in the governorate and can be used by mobile clinics offering health care and services to IDPs.
“It came in difficult time as the country suffers of lack of resources to provide the necessary and lifesaving medications, medical equipment and supplies”, Said Dr. al-Temimi.
“We are happy and highly appreciate WHO’s support to our directorate. His Excellency the Governor of Diyala instructed to send a letter of appreciation to WHO and its staff in Iraq for the valuable assistance they rendered. He also urged WHO to continue its work according to the agreed upon plan to provide medicine, construct a health center in far rural area, train staff on statistical programs, create a software to connect health centers with DoH and MoH, support exceptional campaigns for immunization, provide insecticides and pesticides for vector control in liberated areas and provide assistance to the 3 IDPs camps in Diyala”, added Dr. al-Temimi.
“The support by WHO and partner agencies came as a lifeline for the governorate.” said Mr. Wisam Mohammed Ahmed, Head of Pharmacy Department at the Directorate of Health in Diyala. “It will help the medical staff in hospitals and medical centers to work more efficiently and offer better care to patients.” Mr. Ahmed added.
The consignment included supplementary module pharmaceutical kits, supplementary module equipment, supplementary module renewable kits, traumatological profile/emergency kits, medical supplies support kits, basic units’ w/o malaria, ringer lactate and sodium chloride.
The support to the Directorate of Health in Diyala was made possible through generous contributions from donors and health partners especially The Office of U.S. Foreign Disaster Assistance – USAID-OFDA and the European Civil Protection and Humanitarian Aid Operations – ECHO.
Shares in Genel Energy were trading up 6 percent on Monday afternoon after the company announced that it has reached agreement to acquire stakes in the Chevron-operated Sarta and Qara Dagh blocks (pictured), in the Kurdistan Region of Iraq.
Genel will acquire 30% equity in the Sarta licence by paying a 50% share of ongoing field development costs until a specific production target is reached, together with a success fee payable on achievement of a production milestone. Chevron will retain a 50% interest in the Sarta licence and the Kurdistan Regional Government will hold the remaining 20%. Genel’s estimate of its total spend up to end-2020 is c.$60 million.
Drilling began on the first appraisal well, Sarta-3, in Q4 2017. The well was successfully completed and tested during the second quarter of 2018. Both that and the Sarta-2 well individually tested at rates of c.7,500 bopd. The first phase of development is expected to see these wells placed on production.
Genel will acquire 40% equity of the Qara Dagh appraisal licence and become the operator through a carry arrangement. Chevron will retain 40% of the equity, with the KRG holding the remaining 20%. The Qara Dagh-2 well is set to be drilled in 2020. The Qara Dagh-1 well, completed in 2011, tested oil in two zones from the Shiranish formation.
Closing is subject to approval from the Kurdistan Regional Government.
Murat Özgül, Chief Executive of Genel, said:
“We are delighted to have been chosen as a partner to Chevron. The agreement provides access to a phased development opportunity with significant growth potential at Sarta, and an exciting appraisal opportunity at Qara Dagh. The additions to our portfolio are an important step in our diversification strategy, offering a further opportunity for near-term production and cash-generation.”
In December 2017, Iraqi authorities announced that they had completely freed areas previously controlled by the Daesh terrorist organization.
Today, Iraq has entered a crucial phase of national reconciliation, stabilization and reconstruction of freed regions. These actions are essential for a lasting victory against terrorism and the return of displaced persons.
Humanitarian and stabilization assistance
France and its partners have continued their efforts, and are standing alongside the Iraqi people and Government in order to assist the most vulnerable populations, revitalize the economy and rebuild the country. For example, multi-sectoral emergency assistance (food aid, basic healthcare and essential goods) was provided to almost 200,000 displaced persons during the battle of Mosul.
Since 2017, France has dedicated €60 million to humanitarian and stabilization assistance activities in Iraq, including €20 million to the stabilization of the city of Mosul.
During a visit to Iraq on 26 August 2017, the Minister for Europe and Foreign Affairs, Jean-Yves Le Drian, and the Minister for the Armed Forces, Florence Parly, also confirmed that a budgetary loan of €430 million would be granted to the Iraqi Government.
In addition, France runs humanitarian and stabilization assistance activities through United Nations agencies such as the UN Refugee Agency (UNHCR) and the World Food Programme (WFP). It has contributed €7 million to tools developed by the United Nations Development Programme (UNDP) in Iraq.
Projects in various fields
Security
Restoring security is essential to ensure that displaced people can return voluntarily to regions freed from Daesh control.
As part of the Global Coalition Against Daesh, France is providing military support to local forces working to secure recently freed Iraqi regions, in order to prevent the resurgence of the Daesh terrorist movement.
France is also helping to train Iraq’s internal security forces in the fields of democratic crowd management, mine clearance (including chemical and underwater mines), and post-attack scene management.
Health
In the projects supported by France, special emphasis is placed on the health of Iraqi people. In addition to contributing emergency humanitarian assistance, France has implemented programmes to support health infrastructure (hospitals, health centres in camps and mobile clinics) and provide psychological treatment to populations, who are often traumatized.
France is also strongly committed to rehabilitating the University of Mosul’s College of Medicine, which trains medical staff throughout the Nineveh Plains and beyond. The College was badly damaged during fighting. Today, as a result of France’s commitment and UNDP support, it has been completely rebuilt. It has welcomed a number of students since the start of the 2018 academic year.
Education and support for displaced populations
Education is a priority of France’s assistance. In addition to supporting the University of Mosul, France has committed to programmes rehabilitating schools in the most hard-to-access areas.
It has financed informal educational support projects for children who had no access to education during the Daesh occupation, with a view to reintegrating them into Iraq’s public school system.
Child protection training and campaigns raising awareness of children’s rights have also been implemented by NGOs.
National cohesion
A united Iraq, where all components of society are respected, is essential to ensure that the stabilization process is inclusive and has lasting results. The country must not only focus on physical reconstruction, but also on reconciliation.
France therefore pays special attention to the victims of ethnic and religious violence. A special fund finances projects led by NGOs aiming to respond specifically to the needs of these communities and to encourage their return to their home villages, towns and cities.
At the Paris Peace Forum in November 2018, the French President lent his support to Nadia Murad, Nobel Peace Prize winner in 2018, who has launched a fund to rebuild Iraq’s Sinjar region, which suffered heavily under Daesh. France will contribute €2 million to this fund, which will be used to build infrastructure such as schools and hospitals, create revenue-generating structures, foster the return of displaced Yazidi populations to their lands, among other activities.
Cultural heritage
The ties between France and Iraq when it comes to preserving cultural heritage and archaeology are long-standing.
Three priorities have been identified in recent years in coordination with local authorities: combating trafficking, protecting works and safeguarding the memory of sites. Several training activities for Iraqi heritage preservation professionals have been planned in partnership with the Institut National du Patrimoine (INP) and the Department of Near Eastern Antiquities at the Louvre Museum to improve techniques to combat the trafficking of cultural goods and artefacts.
The Institut Français du Proche-Orient (IFPO) in Iraq, which has a branch in Erbil, has established cooperation with academic institutions in the areas of archaeology and cultural heritage.
In 2018, the Institut Français de Recherche à l’Étranger (IFRE) conducted several digitization and preservation projects on Iraqi sites with funds from the International Alliance for the Protection of Heritage in Conflict Areas (ALIPH).
Justice and fighting impunity
France is committed to fighting impunity for crimes committed in Iraq and has taken every opportunity to make progress on this issue, particularly in the Security Council and other UN bodies. It is funding projects to document the crimes committed to provide information for investigations. Training activities to improve the skills of Iraqi law enforcement authorities are also being conducted to make criminal prosecutions more effective.
Interview : France’s action in Iraq
Eric Chevallier, Director of the Ministry’s Crisis and Support Centre, explains France’s action to support the country’s stabilisation and reconstruction, and the humanitarian aid that we are providing.
(Source: French Ministry for Europe and Foreign Affairs)
Continued Winter Assistance Needed for Displaced and Vulnerable Iraqis: IOM
As winter temperatures set in, accompanied by winds and rain, the International Organization for Migration (IOM) in Iraq has completed the three-month distribution of 25,000 winter non-food item kits. Consisting of heaters, blankets and jerry cans, the kits meet the most urgent needs of 150,000 vulnerable individuals across the country.
IOM’s winterization assistance reached 13,000 displaced households in camps, thousands of displaced families in informal settlements, and thousands of others who have returned to their home communities.
“Although displaced households are continuing to return to their home communities, those remaining in camps or informal settlements are often the most vulnerable and have little to protect themselves against the cold winter conditions,” said Gerard Waite, IOM Iraq Chief of Mission.
In partnership with local governmental authorities, IOM prioritized distributions in hard-to-reach or insecure areas where other humanitarian partners are not present, such as in communities bordering Syria and in Qayrawan and Hatra, in Ninewa governorate.
Of the 1.8 million persons who remain displaced as a result of the conflict with ISIL, over 500,000 are in camps and 140,000 live in critical shelter arrangements (informal settlements, schools or religious or abandoned buildings). More than four million people previously displaced have returned to their homes since mid-2015, but many continue to live in precarious conditions.
As people return home, many have found their personal belongings stolen and their houses damaged. With massive destruction in areas of return and limited economic opportunities, returnee households are exposed to the harsh effects of winter and are unable to afford items to cope with the cold.
The provision of humanitarian assistance in areas of return is therefore critical to support the reintegration of returning displaced families and other vulnerable households in conflict-affected communities.
“After being displaced for a year and a half in the city of Kirkuk, we returned to our village, which was destroyed by ISIL. Everything was damaged, including our house and shop, which was our only source of income. We had to start our life from scratch, while our deteriorating financial condition and cold weather forced us to use firewood as a heating source during the chilly winter nights. We are very happy to receive these items, now we will have a heater to stay warm,” said Nora, a mother of four children, at a distribution in Al Abassi district, Kirkuk governorate.
“Despite the success of this winter response operation, we are extremely concerned for the many Iraqis who remain in displacement who will have to endure another harsh winter in camps and in sub-standard shelters,” said Alberto Preato, Head of IOM Iraq’s Preparedness and Response Unit.
“This year we are piloting innovative approaches to housing reconstruction and cash-based humanitarian assistance to enable displaced families return to their home communities,” he continued.
IOM’s winter non-food item kits are funded by the Office of US Foreign Disaster Assistance (OFDA) and the European Civil Protection and Humanitarian Aid Operations (ECHO).
As more displaced families attempt to return home, IOM remains committed to supporting the Government of Iraq to seek durable solutions for vulnerable displaced persons and address needs of conflict-affected communities throughout the country.
Click here to watch a video of an IOM staff member speaking about winter support for displaced Iraqis and returnees.
Shares in Gulf Keystone Petroleum (GKP) closed 4.3 percent higher on Wednesday after the company provided an operational and corporate update.
Operational
Production operations, underpinned by strong performance of the Shaikan Jurassic reservoir, continue in line with expectations. Average gross production of 31,563 barrels of oil per day (“bopd”) was achieved in 2018, at the upper end of the 27,000 – 32,000 bopd guidance.
The plant debottlenecking programme required to expand gross production capacity to 55,000 bopd from PF-1 and PF-2 remains on schedule for completion towards the end of 2019.
GKP has signed an agreement with Independent Oil Tools to use ‘Rig 1’ during the Company’s workover programme to replace tubing on SH-1 and SH-3 wells and install downhole pumps (“ESPs”) on three other existing wells. The rig has been mobilised and is currently performing a workover on the SH-1 well to install larger bore tubing to increase productivity.
GKP has also signed an agreement with the rig operator, DQE, to use ‘Rig 40’ for its upcoming drilling campaign, due to start in March 2019, with the first four wells (needed for the 55,000 bopd target) expected to be completed in Q1 2020.
Since July 2018, all production from PF-2 has been exported via the Atrush export pipeline which connects to the main Kurdish export pipeline. Additional pumps along with a temporary unloading facility have now been installed at PF-2 which allows the majority of production from PF-1 to be trucked to PF-2 and exported via pipeline. Today, only ca.3,000 bopd are exported by truck via Fishkhabour which lowers HSSE exposure.
Further progress has been made, including delivery of all 16″ pipeline to the field, on the installation by KAR Group of the pipeline also connecting PF-1 to the Atrush export pipeline. This remains on schedule to be brought into service mid-2019, at which point the residual trucking of crude oil will be eliminated.
GKP and its partner MOL have agreed on a staged investment programme to increase gross production up to 110,000 bopd by 2024. The revised Field Development Plan was submitted for approval to the Ministry of Natural Resources in October 2018. The current expansion to 55,000 bopd is already underway.
Corporate
GKP has continued to receive regular oil payments from the Kurdistan Regional Government, with cash receipts of $225 million net to GKP during 2018.
Cash balance of $294 million as at 15 January 2019. The Company remains fully funded to complete the expansion to 55,000 bopd.
Gross capital expenditure guidance for the total 55,000 bopd project phase remains unchanged at $200 million to $230 million.
Of the 2018 approved gross budget of $91 million, ca.$40 million has been transferred to early 2019 which was primarily driven by delays in delivery of drilling and well completion equipment.
Outlook
Given the active 2019 investment programme, particularly in new wells and workovers, the Company anticipates improved production levels this year and expects gross average production guidance to be in the range of 32,000 – 38,000 bopd.
The above guidance takes account the latest drilling and project schedules, but also the temporary plant shut-downs required in 2019 for the tie-in of new facilities and wells being offline while workovers are taking place.
55,000 bopd production target moved to early 2020 due to delays in the delivery of equipment, affecting the start date of the drilling campaign, originally January, now March 2019.
The Company intends to host a Capital Markets Day in the first quarter of 2019. Further details will be announced at a later date.
Commenting, Jón Ferrier, CEO, said:
“Having successfully laid the foundations for our expansion plans in 2018, we are very pleased to have now initiated our new investment programme at Shaikan.
“We continue to make considerable operational headway as we look to safely increase production to 55,000 bopd, in line with our strategy. 2019 is set to be another important year for Gulf Keystone and we look forward to keeping our stakeholders updated on our ongoing progress.”
Genel Energy has issued the following trading and operations update in advance of the Company’s full-year 2018 results, which are scheduled for release on 20 March 2019. The information contained herein has not been audited and may be subject to further review.
Murat Özgül, Chief Executive of Genel, said:
“2018 was a very positive year for Genel, which saw us generate material free cash flow and further transform the balance sheet. An expected year-on-year increase in production means we are set to continue this performance in 2019, with low-cost assets forecast to generate over $100 million in free cash flow even if the oil price averages $45/bbl.
“As we generate cash we will continue to invest in the business to maximise the value of our existing portfolio. We are also working hard to bring in new assets that are complementary to our cash generation story. We are focused on building a stronger company with sustainable and material cash flow and multiple growth opportunities from which to create significant shareholder value.“
FINANCIAL PERFORMANCE
$335 million of cash proceeds were received in 2018 ($263 million in 2017), an increase of 27%, of which $98 million was received in Q4
Free cash flow totalled $164 million in 2018 ($99 million in 2017), an increase of 66%, representing a free cash flow yield of 27% on the year-end share price
Unrestricted cash balances at 31 December 2018 were $334 million ($162 million at 31 December 2017), with net cash at $37 million ($135 million net debt at 31 December 2017)
Capital expenditure for 2018 totalled $95 million, of which $70 million was cost recoverable spend on producing assets
2018 OPERATING PERFORMANCE AND 2019 ACTIVITY OUTLOOK
2018 net production averaged 33,690 bopd, with Q4 averaging 36,920 bopd. Production and sales by asset during 2018 was as follows:
Tawke PSC (Genel 25% working interest)
Tawke PSC production averaged 113,020 bopd in 2018, with production from Peshkabir contributing 27,660 bopd to this figure
Production in Q4 2018 averaged 127,220 bopd, of which Peshkabir contributed 50,130 bopd
The Peshkabir-8 well completed in December 2018, and is currently producing just under 10,000 bopd. Results of the Peshkabir-9 well are expected shortly
While further production wells are set to be drilled in 2019, Peshkabir activity in 2019 will focus on field management facilities and the utilisation of associated gas to enhance oil recovery at the Tawke field
Taq Taq PSC (Genel 44% working interest and joint operator)
Taq Taq field production averaged 12,350 bopd in 2018
Production in Q4 2018 averaged 11,640 bopd
Drilling operations on the TT-32 well have now been completed, and test production is underway. The well is currently flowing at a rate of over 3,000 bopd, and still cleaning up, with further zones to be tested ahead of an expected stabilised production rate of c.2,000 bopd
The rig has now moved to drill the horizontal sidetrack TT-20z well, which will drill the Shiranish in the western flank of the field with an aim to increasing productivity
Three further wells are scheduled to be drilled in 2019, as Genel continues to target the flanks of the field with the aim of delivering a year-on-year production increase
Bina Bawi and Miran (Genel 100% and operator)
Field development plans for both Bina Bawi and Miran oil and gas are under discussion with the KRG, and may entail a phased development approach in order to reduce initial capital expenditure and achieve the earliest date for first gas. An extension to the conditions precedent is expected to be granted shortly
Genel is reviewing the value of the Miran PSC carried in the Company accounts, and will update this as part of the year-end results process
African exploration update
Onshore Somaliland, seismic processing has now completed on the SL-10-B/13 block (Genel 75% working interest, operator) and analysis and interpretation is underway. Initial indications confirm the Company view that the block has hydrocarbon potential. Genel continues to develop a prospect inventory and assess next steps ahead of a farm-out process and potentially spudding a well in 2020. On the Odewayne block further seismic processing is being considered in order to complete the Company’s understanding of the prospectivity of the block
On the Sidi Moussa block offshore Morocco (Genel 75% working interest, operator), the acquisition of a c.3,500 km2 multi-azimuth broadband 3D seismic survey completed in November. PSTM and PSDM processing will continue through 2019. Genel has no additional work commitments relating to the licence. A decision will be made on whether to drill a well, and the appropriate equity level, once processing has progressed sufficiently
2019 GUIDANCE
Genel expects to generate material free cash flow in 2019
Genel generates positive free cash flow at and above an oil price of $20/bbl
In light of the Company’s balance sheet strength and ongoing material cash generation, management is appraising the most effective model for balanced capital allocation in order to take advantage of growth opportunities, make value accretive additions to the portfolio, and pave the way to returning capital to shareholders at the appropriate time
Combined net production from the Tawke and Taq Taq PSCs during 2019 is expected to be close to Q4 2018 levels
Capital expenditure net to Genel is forecast to be c.$115 million, with the majority being cost-recoverable spend on current producing assets. Capex includes:
Tawke and Taq Taq net to Genel of c.$100 million
Bina Bawi and Miran maintenance capex of c.$10 million, with the potential for this figure to be updated should there be positive developments on Bina Bawi commercial discussions
African exploration cost of under $5 million, largely comprising processing costs relating to Moroccan seismic
Opex: c.$30 million
G&A: c.$20 million
The Company continues to actively pursue growth and appraise opportunities to make value-accretive additions to the portfolio
