GENEL’S newly-promoted chairman Tony Hayward yesterday announced the oil company would put on hold all exploration work to rein in costs, after being stung by overdue payments from Kurdistan operations.
The London-listed oil firm is currently owed nearly $400m (£597m) in oil sales payments from the Kurdistan Regional Government (KRG).
Hayward was promoted to chairman of Genel from chief exec on Sunday after the resignation of Rodney Chase.
Genel’s decision to stop exploring this year means a $50m reduction in the company’s capital expenditure programme to $150-200m, it said.
Genel last year wrote off $500m after poor drilling results in Africa.
The KRG is struggling to find funds to pay oil firms for crude, which in effect turns the tap off one of Genel’s main revenue streams.
Genel was owed around $378m by the KRG on 30 June, from around $230m last year.
“Over 600,000 bopd of exports are now flowing to [Turkish oil-exporting port] Ceyhan and, as distribution of the resulting revenues stabilises, the KRG is moving towards a financial position from which to make export payments to contractors,” said Hayward.