Genel Energy is due to begin transferring Iraqi natural gas to Turkey by the end of 2017, and its volume thereafter will rise year on year, said Mehmet Sepil, president of Genel Energy.
The Turkish Ministry of Energy and Natural Resources Taner Yildiz signaled the delivery of Iraqi natural gas to Turkey on Thursday at the Bosphorus Energy Club's third meeting in Istanbul, stating that once Iraq starts its gas production, transmission to Turkey will become possible.
"By the end of 2017 or the beginning of 2018, four billion cubic meters of natural gas from Iraqi fields will arrive in Turkey," Sepil said.
"The volume will increase by two billion cubic meters every year, and will eventually reach 10 billion cubic meters," he added.
Genel Energy, an Anglo-Turkish energy company operating in Iraq and Africa, and one of the biggest international energy companies operating in Iraq, had announced in mid-November that it acquired a stake in the Bina Bawi gas field in northern Iraq.
Additionally, the company has also reached an agreement with the Ministry of Natural Resources of the Kurdistan Regional Government for the development of the Miran and Bina Bawi gas fields in the region.
Sepil had stated on Nov. 13 in a statement that it is possible to export at least a total of 20 billion cubic meters of natural gas over the course of 15 to 20 years, from the two fields to Turkey.
"The natural gas resources in northern Iraq could be a good alternative for both Turkey and Europe," Sepil said.
"Everything is going as planned. The important thing is to have a market at the end of the gas pipeline," he added.
Genel Energy estimates proved reserves in the two fields totaling 8.4 trillion cubic feet (238 billion cubic meters), according to its website.
The company also has interests in the Taq Taq and Tawke oil fields of northern Iraq, which have a currently estimated gross proven and probable reserves of 1.3 billion barrels of oil (453 million barrels net to Genel Energy).
- Falling oil prices
Sepil stated that the decline in oil prices is not good for oil producing companies, but beneficial to Turkey - an oil consumer.
"It is supply and demand that determines the price of oil," Sepil said, adding that as China's growth rate decreased, the expected rise in oil demand was not realized.
Oil prices are in decline since June, and reached their lowest point in five years, below $64 per barrel on Wednesday, due to low global oil demand, and an overall increase in oil supply in the world.
In addition, Sepil stressed that many countries increased their oil production, including Libya, Iraq and Nigeria which created an excess amount of oil in the world.
Sepil emphasized that many oil companies that have large costs and expenditures, especially those working on offshore fields, are bound to fail. He claimed, however, that Genel Energy is different because they work onshore in the Middle East where their break-even price is very low.
The break-even price, the minimum price level that a producer has to sell its product in order to cover his production costs, becomes an important threshold for companies in the face of high oil prices.
"The sum of our capital expenditure and operational expenditure is also low. In addition, we have cash during this time of low oil prices," he added.
Sepil stated that he expects oil prices to be around the $90 per barrel mark in mid-2015, since some oil companies will have to stop production with the falling prices and operational costs.
"We are expecting to grow in the Middle East through acquisitions," he concluded.
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