Genel Energy, the Turkish independent recently backed into Tony Hayward’s Vallares cash fund, has again stepped up the enthusiasm for acquiring DNO.
Both firms are focused on exploration and production in the Kurdish region of Iraq, a sector that has been set alight by Exxon’s acquisition of six exploration blocks in defiance of Baghdad’s blacklisting policy for oil companies hoping to operate in the South.
“DNO is our natural partner so it makes a lot of sense if we can take them into Genel,” Mehmet Sepil, CEO of Genel Enerji, told Reuters on the sidelines of an oil and gas conference in Arbil, the capital of Iraqi Kurdistan.
Tony Hayward, who will be Genel Energy’s CEO once the company relists in London on 21 November, had already expressed an interested in DNO, the first company to acquire a production sharing contract in the region and begin exporting oil.
DNO is busy with an acquisition of its own, merging the MENA assets of the UAE’s RAK Petroleum in a bid to widen its regional expertise and asset portfolio.
“Everyone in the industry would say the same as I: the assets of DNO International are much more interesting than RAK Petroleum,” Hayward said in an interview with the Norwegian newspaper Finansavisen on 24 October. “Just now we must await the results of this [RAK Petroleum] merger, but it’s clear that DNO International could be interesting to us eventually.”
“We are interested in a few companies, (but there are) no detailed talks at this point,” Sepil told Reuters, “in next few months you’ll see a lot of announcements coming from us.”
Sepil will not be taking on management responsibilities at the London listed Genel, and is having his voting rights in the company restricted following corporate governance issues in 2010.
However, the bounce in the shares of London-listed independents means that, for vehicles like Vallares keen to seek out risk for reward, the Kurdistan region is already a little less lucrative then it was.
“The Exxon story was probably great news for everybody but not for us,” Sepil told Reuters. “I really wished they had come six months later.”
DNO’s shares traded up 20.78% in Friday’s trading in Oslo, while Gulf Keystone’s shares traded up 25% in London on the news of Exxon’s deal with the KRG and (unconfirmed) speculation that the US supermajor has bought the KRG’s reversionary rights in the giant Shaikan field.
