2024-03-26 11:40:40
(Alliance News) – Genel Energy PLC insisted Tuesday that it remains “well positioned” for this year, despite the closure of the Iraq-Turkey oil pipeline that sent production and revenues plummeting.
The oil and gas exploration and production company, which previously focused on exports to the Kurdistan Region, has had to refocus on generating revenue through domestic sales since the closure of the Iraq pipeline -Turkey in March last year.
Genel said it recorded a pre-tax loss of USD 28.28.3 million in 2023, following a profit of USD 122.1 million in 2022.
Revenue fell 79%, from $401.9 million to $84.8 million. Production fell 59%, from 30,150 barrels of oil per day to 12,410, as Genel predicted in late January. At the same time, the average price of Brent oil fell by 19%, from USD 101 per barrel to USD 82.
Genel said dividends declared in 2023 were 12 US cents per share, down 33% from the 18 cents declared in 2022.
“It is difficult to envisage the year 2023 without it being dominated by the closure of the Iraq-Turkey oil pipeline,” commented Director General Paul Weir. “The suspension of our export route has resulted in a significant reduction in production and cash flow.
Nevertheless, he added: “We are [maintenant] a lean, simplified company that maintains clear objectives – generating resilient and sustainable cash flow, diversifying our revenues through the addition of new assets, and maintaining a strong balance sheet.”
Genel had cash of USD 363.4 million as of December 31, compared to USD 494.6 million a year earlier.
Turkey shut down the pipeline following the International Chamber of Commerce ordered Ankara to pay around $1.5 billion in damages to Baghdad for transporting oil from the Kurdistan region without the agreement of the Iraq.
Looking ahead, Weir said Genel was “now well positioned in 2024, with a reshaped and resilient business.”
“Genel has established a solid platform from which it can move forward,” he continued. “Reopening the pipeline has the potential to more than double cash generation.
However, Genel acknowledged that while discussions continue with a view to a possible reopening of the gas pipeline, there is still no precise timetable for the restart of exports.
Genel shares were down 2.0% at 82.34 pence late Tuesday morning in London.
By Emma Curzon, journalist at Alliance News
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