March 2012

London-listed Genel Energy is actively looking to acquire oil exploration assets in the semi-autonomous Kurdistan region of northern Iraq and plans to tap licenses in Lebanon, Chief Executive Officer Tony Hayward told Reuters. Hayward said Genel was not ready to pay high prices for companies in Kurdistan, where the entrance U.S. oil major Exxon Mobil had driven up valuations, but it was still seeking assets there, clarfiying comments made in February. "We are continuing to look for new opportunities in the Kurdistan region and as we said we are looking at other parts of Africa and Middle East as well," Hayward said. "But our focus, because I think we see the biggest opportunities and we think we have room for competitive advantage is undoubtedly in Kurdistan," Hayward said. "We said we were not going to buy a couple of companies that we thought now fully priced. That does not mean we are not still looking very actively. We are negotiating," Hayward said without identifying the companies they are negotiating with. Hayward said Genel is looking at opportunities in Kurdistan similar to the deals they struck to raise its stake in the Chia Surkh exploration block in Kurdistan in January. "We did the deal in Chia Surkh when we acquired Longford Energy interests in Chia Surkh. It was like acquiring the company because they only had one asset and we decided that it was easier to transact at the asset level rather than the corporate level and we are continuing looking at opportunities of that sort in the Kurdistan region," Hayward said. Genel raised its stake in Chia Surkh, which is estimated to hold 305 million barrels of oil and gas resources, to 80 percent from 20 percent, paying $68 million for a 40 percent stake and $26 million for a 20 percent stake from sellers Longford Energy and Petoil Petroleum. Kurdistan-focused Genel, which was established last year when the bid vehicle of former BP chief executive Hayward bought Turkey's Genel Enerji, was also looking for exploration opportunities in Africa. [ID:nL6E8CG0KE] "We are going to look in other parts of Africa, we might find some technology advantage... What we are looking for is some sort of exploration opportunities over the next two-three years. We are trying to find a place where the next wave of exploration opportunities are going to unfold. There are some areas in Africa where there is a wave of exploration activity sort of rolling through the region. That's true for two or three places." Genel is also looking at licenses in Lebanon as part of an as yet unformed consortium, Hayward said. "It's a bit early to decide exactly which consortium it might be. It is still unfolding," he said. Shares in Genel closed at 750 pence on Wednesday.