Genel Energy CEO: No Surprise if Oil Prices Continue Rising

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Researched by Industrial Info Resources (Sugar Land, Texas)--The rising geopolitical tensions in the Middle East and concerns about oil supply are causes for concern for oil-importing countries and oil-sector executives. Tony Hayward, the CEO of the northern Iraq-focused oil company Genel Energy plc (LSE:GENL) (London, England), is not an exception. "It wouldn't be a surprise for me to see a $150-per-barrel oil price if a new political crisis ignited in the Middle East," Hayward said in an interview on Bloomberg HT Television in Istanbul.

Crude oil prices have risen 15% since the begining of this year. Crude oil for May delivery dropped 2.5% percent, to $102.78 a barrel on the New York Mercantile Exchange, the lowest settlement since February 16.

Genel Energy was formed last year by a reverse merger between private Turkish firm Genel Enerji and Vallares, an investment vehicle started by former BP plc (NYSE:BP) CEO Tony Hayward and financier Nat Rothschild. Tony Hayward stepped down from his position as chief executive of BP in the fall of 2010 after the oil spill in Gulf of Mexico.

"We aim to grow Genel Energy 35% in next three years, and want to grow substainally by using our $1.9 billion of available cash. We're also looking for new companies for merger & aqusitions," Hayward said.

The company raised $2.1 billion through its initial public offering last June. Genel Energy's biggest assets are two oilfields, Taq-Taq and Tawke, in northern Iraq. These fields have combined proven and probable reserves of 1.2 billon barrels, and proven, probable and possible reserves of 1.9 billon barrels. Genel Energy owns 44% of the Taq Taq operation and 25% of the Tawke operation.

Genel Energy plans to increase production from its key Taq-Taq field to 200,000 barrels per day by 2014. The company plans to build a pipeline to ship production from northern Iraq to the Kirkuk-Ceyhan line.

Regarding Turkey's oil exploration efforts, Hayward is pessimistic. "Turkey has been searching for oil for the last 50 years, but cannot find a feasible or reasonable oil field to operate," said Hayward. "I don't think that Turkey has large reserves of oil."

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