Kurdistan takes 17% stake in Heritage/Genel merger

Kurdistan Regional Government waives $1.1bn fee in return for shares

(Getty Images)
(Getty Images)

Other stories: Top 10 billion dollar oil deals of the summer | 2009's winners and losers in the oil industry10 events in oil's history that shook the world | Top 10 Gulf mega projects | Top 10 largest publicly traded oil companies | Top 10 National Oil Companies by production | World's 10 largest oilfield services companies | World's 10 largest oil and gas contractors

Heritage Oil has announced that Kurdistan Regional Government (KRG) is to become a major shareholder in the enlarged company that will be created when the London-listed exploration and production (E&P) company completes its proposed merger with Genel Energi of Turkey.

The KRG will receive 17% of the new company’s shares in return for waiving a US$1.1 billion payment Genel Energy were due to make as a “capacity building liability” – basically a payment for drilling and oil production rights in the region.

“We recognise the important role Turkey is playing in the region and are delighted that the KRG will be a significant long-term shareholder, thereby providing their endorsement and support to the enlarged group,” Tony Buckingham, CEO of Heritage said.

Heritage Oil agreed the merger deal with Genel back in June. The deal values the new company at US$5 billion.

Both companies believe that the move will result in the new company having the financial capacity to bring into production its enlarged development and exploration portfolio, create the infrastructure for the development of the Taq Taq and Miran assets in Kurdistan, while also generating significant cash flow following the commencement of oil exports on 1 June 2009.


Most Popular

Digital Edition

Oil & Gas Middle East - September 2020

Subscribe Now