To downgrade oil reserves once may be regarded as unfortunate; to do so twice looks like carelessness.
Genel Energy’s stumbles in the Kurdish region of Iraq have sent the value of its shares down to just 7 per cent of their 2014 high. While serious for the company, this latest bad news is more of a blow for the region’s economic and political aspirations.
Genel Energy, launched by the former BP boss Tony Hayward in 2011, cut its reserves at the flagship Taq Taq field, up in the Kurdish mountains, from 499 million barrels to 172 million barrels in 2016, then on March 28 again to 59 million barrels. Taq Taq production has tumbled from 116,000 barrels per day to 19,000 bpd.
The reservoir rocks are highly fractured, allowing wells to drain oil rapidly through the cracks. But the small pores in the reservoir rock matrix here, which hold the bulk of the oil in typical fields, are not contributing to production at all. Once the relatively small volume of oil in the fractures is drained, they fill with water.
Genel is not the only company to get into trouble with Kurdish geology. MOL Group’s Akri-Bijeel block slashed its reserves by 99 per cent in 2015, Afren went bankrupt after writing down the Bardarash field in 2015 while DNO, Genel’s partner in the Tawke field, had to suspend production at the Summail gasfield after it began producing water.
Genel still has hopes for the Kurdish region, via development of the large Miran and Bina Bawi gasfields. But progress on a gas sales agreement with Turkey has been painfully slow and the company needs a partner to contribute the capital for field development. The cash-strapped Kurdish government will also have to finance a processing plant and pipeline. Oddly, given strained relations with their main gas suppliers, Russia and Iran, the Turks have not been in a particular hurry.
For the Kurds, Genel’s decline has brought further problems. Already struggling with about US$20 billion of debt and long arrears to the oil companies, every barrel is vital. Khurmala, the northern part of the giant Kirkuk field, has been operated by the local Kurdish company KAR since 2009. Following ISIL’s capture of Mosul, the Kurds took control of most of the other Kirkuk-area fields, which with Khurmala now yield about 350,000 bpd out of the region’s 600,000 bpd production.
Some new fields are on the way. The most important is Atrush, operated by Abu Dhabi’s Taqa, whose recently completed feeder pipeline allows it to produce 30,000 bpd. Heavy oil output from the giant Shaikan field has also grown, but Gulf Keystone, its operator, cannot do much more without further investment and regular payments in full from the government.
Growing dependence on the disputed front-line territories around Kirkuk for financial solvency casts a cloud over Kurdish national aspirations. Two of the region’s three leading parties – the KDP, which largely controls the oil portfolio, and the PUK, which rules Kirkuk – have agreed on a referendum on independence. They have been held before but this time it seems more serious.
Baghdad, though, has not accepted the fait accompli of Kirkuk’s change of control. As ISIL is gradually driven out of Mosul, the federal authorities’ attention may shift to a resolution of matters with the Kurds. The northern part of the Kurdish region is effectively controlled by the KDP, which is under strong Turkish influence. But the advance of a Syrian Kurd-led alliance on ISIL’s capital of Raqqa worries Ankara. Now the Russians, via a deal for their state champion Rosneft to buy Kurdish oil for an advance payment, have strengthened their role in the mix.
Geography and then geology have been the Kurds’ friends in advancing their quest for nationhood. But now Genel’s fractured rocks and fractured finances have added another obstacle in the way of piecing together a Kurdish state.
Robin Mills is the chief executive of Qamar Energy, and author of The Myth of the Oil Crisis.
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
UAE currency: the story behind the money in your pockets
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
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Salah in numbers
€39 million: Liverpool agreed a fee, including add-ons, in the region of €39m (nearly Dh176m) to sign Salah from Roma last year. The exchange rate at the time meant that cost the Reds £34.3m - a bargain given his performances since.
13: The 25-year-old player was not a complete stranger to the Premier League when he arrived at Liverpool this summer. However, during his previous stint at Chelsea, he made just 13 Premier League appearances, seven of which were off the bench, and scored only twice.
57: It was in the 57th minute of his Liverpool bow when Salah opened his account for the Reds in the 3-3 draw with Watford back in August. The Egyptian prodded the ball over the line from close range after latching onto Roberto Firmino's attempted lob.
7: Salah's best scoring streak of the season occurred between an FA Cup tie against West Brom on January 27 and a Premier League win over Newcastle on March 3. He scored for seven games running in all competitions and struck twice against Tottenham.
3: This season Salah became the first player in Premier League history to win the player of the month award three times during a term. He was voted as the division's best player in November, February and March.
40: Salah joined Roger Hunt and Ian Rush as the only players in Liverpool's history to have scored 40 times in a single season when he headed home against Bournemouth at Anfield earlier this month.
30: The goal against Bournemouth ensured the Egyptian achieved another milestone in becoming the first African player to score 30 times across one Premier League campaign.
8: As well as his fine form in England, Salah has also scored eight times in the tournament phase of this season's Champions League. Only Real Madrid's Cristiano Ronaldo, with 15 to his credit, has found the net more often in the group stages and knockout rounds of Europe's premier club competition.
