Genel Energy, the Iraqi Kurdish Regional Government (KRG) focused oil company, received approval from the KRG for the acquisition of stakes from American oil and gas major Chevron in the Sarta and Qara Dagh blocks, the company announced on Thursday.
With the acquisitions, the London-listed Genel Energy will now have a 30 percent equity in the Sarta production-sharing contract (PSC), with Chevron holding 50 percent and the KRG owning the remaining 20 percent, Genel Energy said.
In the Qara Dagh PSC, Genel will have 40 percent equity as the operator, with Chevron holding 40 percent and the KRG the remaining 20 percent.
The Sarta block is located in the north of Erbil, while the Qara Dagh block is located in the south of Sulaymaniyah.
Genel Energy said the final investment decision for Sarta's phase 1A development has now been taken.
"Phase 1A begins with two wells, recompleting the Sarta-2 well and placing the Sarta-3 well on production, both of which flowed approximately 7,500 barrels of oil per day (bpd) on test, and the construction of a central processing facility with a 20,000 bpd capacity," the company said.
First oil from the Sarta block is expected in 2020, with a total cost to Genel Energy estimated at $60 million to the end of 2020.
Genel Energy expects another well in the Sarta block to follow within twelve months of first oil, and further production capacity is expected to be added as the field is developed and production ramps up.
Meanwhile, the company said that work is underway on assessing the optimal location for the Qara Dagh-2 well, which is set for drilling in 2020.
By Ebru Sengul