Vallares to gain Iraqi oil fields in £2.5 billion deal

UK investment vehicle Vallares, headed by the former CEO of BP Tony Hayward, is to merge with Turkey’s Genel Energy in a £2.5 billion deal.

The transaction, which will give Vallares oil fields in northern Iraq’s Kurdistan region, will see the new company trading as Genel Energy Plc, with Hayward as CEO.

The semi-autonomous Kurdistan region is thought to contain about 40 billion barrels of oil and 60 trillion cubic feet of gas.

Genel currently produces 41,000 barrels a day, but that figure is expected to more than double by 2013, reaching 90,000 barrels a day. The company has proved and probable reserves of 356 million barrels, with the cost of E&P in the Kurdistan area low compared with other regions of the world.

Genel is due to drill five exploration wells within the next year, targeting total resources in excess of 750 million barrels.

Hayward resigned from his role as CEO of BP 14 months ago following the Deepwater Horizon oil disaster in the Gulf of Mexico.