Hannam & Partners to buy oil block equity options from KRG – sources

11 Feb 2015 – The Kurdistan Regional Government (KRG) is preparing to sell its back-in rights to several of its oil blocks to UK firm Hannam & Partners, according to two sector bankers, a lawyer and a person familiar with the situation.

The KRG holds the rights, an option to take an equity stake of an oil block after the declaration of commerciality, of about 20% in the regional blocks.

The deal could be finalized within a few months, the person said.

The government has been looking for ways to monetize its assets to raise funds needed to combat the Islamic State militant group, reconstruct war-damaged infrastructure and deal with the crisis coming from people fleeing Syria, the first sector banker said.

“The Kurdish government is in need of a slush fund. It is desperate times,” the second sector banker said. “It makes sense to double up and go for broke. When you’ve got an emergency situation, you think in the short term.”

Appetite for investing in the region will diminish further should the Islamic State establish itself as a permanent neighbor so it makes sense to act now, the banker added.

Kurdistan’s oil blocks are DNO and Genel’s Tawke, with a 2P resource of 771 mmbl 2P; HKN Oil & Gas’s Swara; TAQA, ShaMaran Petroleum and Marathon Oil’s Atrush, which has 2C reserves of 647MMbbl; MOL’s Bijeel; Oryx Petroleum’s Ain al Safra, which has 2C resources of 22MMbbl; Gulf Keystone’s Shaikan, with resources of 2.7Bnbbl; Afren’s Barda Rash; which has 2P reserves of 190MMbbl. OMV’s Bina Bawi, which has resources between 500 and 1000 MMbbl; DNO’s Bastora, which has 100MMbbl of recoverable resources; Oryx Petroleum’s Banan has 2C resources of 40MMbbl; and Oryx’s Zey Gawra has 2P reserves of 71MMbbl. There is also Kar Group’s Khurmala; North Oil’s Kirkuk field, with 1.7Bnbbl of reserves; Dana Gas and Crescent Petroleum’s gas field Chemchemal, with 2.1tcf of resources; Western Zagros’ Sar Qala, with 2C resources of 24 MMbbl; Genel and Addax Petroleum’s Taq Taq, with resources of 647 MMbbl; Genel’s oil and gas block Miran, which has resources of 3.75tcf of gas and 161MMbbl of oil; Talisman and Western Zagros’ Kurdamir, and Genel’s Chia Surkh, which is thought to have 306MMbbl of reserves.

Hannam & Partners is a corporate finance boutique that was set up in September 2014 by Ian Hannam, the former owner of Strand Partners. Hannam previously had dealings in Kurdistan, and has good contacts within the KRG, said a broker and the lawyer.

Hannam & Partners declined to comment. The government did not respond to a request for comment.

by Katie McQue

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