Kurd oil firms continue to boost output despite fall in prices

(MENAFN- Arab News) LONDON: Oil producers in Iraqi Kurdistan are unrelenting in their goal to boost output even after the collapse in international prices to below $50 a barrel.Genel Energy headed by former BP Plc chief Tony Hayward is sticking with plans to increase capacity 74 percent to 400000 barrels a day this year at its Kurdish Taq Taq and Tawke fields. Norway's DNO ASA owns 55 percent of Tawke."The operational side of the business remains very resilient and very strong and we maintain our production increase targets" Genel's Chief Financial Officer Julian Metherell said by phone from London. "Even at $50 a barrel we are looking at a revenue of $350 million to $400 million."Gulf Keystone Petroleum another oil producer in the semi-autonomous region last month raised output by 60 percent to 40000 barrels a day and sees 70000 barrels a day in 2017.Oil prices dropped below $50 a barrel this month from $115 in June as the US pumped crude at the fastest rate in more than three decades and the Organization of Petroleum Exporting Countries resisted calls to cut output. The United Arab Emirates and Qatar estimate surplus crude of 2 million barrels a day.Iraq is pumping at a record pace and will continue to boost exports this year amid a supply glut that's pushed prices down Oil Minister Adel Abdul Mahdi said Jan. 19. The nation holder of the fifth-largest crude reserves is rebuilding its energy industry after decades of wars and economic sanctions."Because of the new challenges especially the price of oil Iraq has to try its best to raise its oil production and exports" Deputy Prime Minister Rowsch Nuri Shaways said Wednesday at the World Economic Forum in Davos Switzerland.An agreement in December resolved months of feuding between Iraq's Kurdish region and the central government in Baghdad over who had the right to export crude from the semi-autonomous area.The deal allowed for as much as 550000 barrels a day to be shipped through Turkey from northern Iraq including 250000 a day from the Kurdish region. The central government previously threatened legal action against buyers of crude from Kurdistan.Genel's share of output from its two oilfields in the area rose 58 percent to 69000 barrels a day in 2014 and it targets 90000 to 100000 barrels a day this year it said Wednesday."Genel is exposed to some of the lowest cost rocks globally with a big resource base that should be the envy of many" Thomas Adolff an analyst at Credit Suisse Group AG said in a note to investors. "Within the Kurdish Region of Iraq it has the best asset base and there is positive above- ground momentum politically and operationally."Operating expenditure is about $2 to $3 a barrel and "cash break-even" is $30 to $35 a barrel Genel's Metherell said.Oil prices may yet fall further as members of OPEC which includes Iraq resolve to keep pumping crude and US supply rises according to Harry Tchilinguirian head of commodity markets strategy at BNP Paribas SA in London.Prices have yet to fall as much as in 2008 when benchmark Brent crude reached $36.20 in the wake of the financial crisis.Genel is "well positioned to continue to grow even in a period of sustained low oil prices" Chief Executive Officer Hayward said Wednesday in a statement.