Vallares buys Iraq-focused oil producer for $2.1 billion

7th September 2011, Comments 0 comments

Vallares, the investment vehicle led by ex-BP head Tony Hayward, announced on Wednesday a deal to buy Genel Energy International, the biggest oil producer in Iraq's autonomous Kurdistan region, for $2.1 billion.

Iraq's Kurdistan government was expected to approve the deal later this month, Vallares said in a statement.

"The acquisition will create a vehicle with exposure to the highly prospective Kurdistan hydrocarbon region," Vallares said.

"The Kurdistan Region of Iraq represents one of the last great frontiers in oil and gas ... The relative security and stability of the Kurdistan Region of Iraq has allowed it to focus on procuring investment in the oil sector," it added.

Vallares said it would issue new shares worth $2.1 billion (1.5 billion euros) to create a new group, Genel Energy PLC. Vallares and Genel will each have a 50-percent stake in the new company.

Hayward will be the chief executive.

Vallares raised a similar amount in an initial public offering in June.

Hayward, who resigned from British energy giant BP last year over his much-criticised handling of the Gulf of Mexico oil spill disaster in 2010, said Vallares' investors were "acquiring a strong existing business with excellent producing assets ... and immense potential for future growth."

Genel chief executive Mehmet Sepil said: "The scale of recent hydrocarbon discoveries in the Kurdistan Region of Iraq has been significant and I think this trend will continue."

He added that the tie-up gives Genel "an internationally listed, well-capitalised and agile company which already has deep experience, good relationships and first-class assets in the region."

Genel Energy produces 41,000 barrels of oil equivalent a day in Iraq's Kurdistan region but this is set to more than double to 90,000 barrels by 2013, the statement said.

Its biggest producing asset is the Taq Taq oil field, in which Genel has a 44-percent stake.

Hayward, who is set to gain financially from the deal, invested £100 million ($160 million, 113 million euros) of his own money in Vallares, whose other founders include financier Nathaniel Rothschild.

Hayward resigned as chief executive of BP in July 2010 after his gaffe-prone handling of the environmental catastrophe along the Gulf of Mexico coast.

He was vilified in the United States after trying to downplay the environmental impact of the spill and saying that he wanted his "life back" amid intense media coverage of the catastrophe.

An explosion on the BP-leased Deepwater Horizon rig in the Gulf of Mexico in April 2010 killed 11 workers, caused millions of barrels of oil to spew into the sea and left the British company facing huge compensation payouts.

© 2011 AFP

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