The economic advice

Finance Blog

Genel Energy, Turkish oil kings mending bridges in Kurdistan

  • Home
  • Investment
  • Genel Energy, Turkish oil kings mending bridges in Kurdistan

Genel-aims-to-raise-400M-for-field-development

Every company leader has an entrepreneurial streak by his very nature, but in Mr. Mehmet Sepil’s case, this would be an understatement. Aside from having the derring-do to enter into a war zone, he was the first person to set up an oil company in Iraq – a Turkish one to boot – with Genel Energy in 2002. Add to this that relations between Turkey and his adopted region were anything but cordial at the time, and one can agree with Mr. Sepil when he asserts that he ‘‘helped mend Turkish-Kurd relations,’’ with Genel acting as the symbolic olive branch. As Mr. Sepil is keen to point out, he and his company have sparked a new era for business and wider harmony between the two governments.

Conditions weren’t overly conducive to doing business either: With telecommunications and transport in a primitive state, there were obstacles aplenty. It’s safe to say the risk has paid off. The KRG* accepted the olive branch extended its way, and returned it: Genel was rewarded for its enterprising spirit with the potential billion-barrel Taq Taq oil field offering, from the very first year. ‘‘The advantages to being an early-adopter,’’ in Mr. Sepil’s words. This proved to be the tip of the iceberg: From those humble beginnings, Genel has added six additional production fields to its portfolio – five of which have produced discoveries – making it the biggest oil producer in Kurdistan.

The recent merger, that was secured with British company Valleres in 2011 – and the subsequent listing on the London Stock Exchange – has propelled Genel to international attention. Though this shifts the company identity to an Anglo-Turkish one, it takes nothing away from its strong Turkish brand. Despite the merger, it remains the only independent Turkish oil and gas company with its level of assets in Kurdistan. This was a real coup for such a young company, and was deserved recognition for Genel’s staggering progress in little over a decade in Kurdistan.

All the more so when you consider Mr. Sepil’s background. A born and bred ‘‘jack of all trades’’ entrepreneur, he’s proven that a lack of technical expertise can be compensated for with enterprising spirit and initiative. Having worked on construction projects in the region in the late ’90s, Mr. Sepil identified both a niche in the market and the societal conditions to exploit it, and penciled in a quick return. Good judgment, prescience, call it what you will: Mr. Sepil and Genel have proven a success story against all odds.

Though its horizons are broadening, with interesting opportunities in gas, for example, Kurdistan is ‘‘a book that will never close’’ for Genel, in the words of Mr. Sepil. It’s where the story started and an attachment has been built with the region and people as Turkish-Kurd relations have steadily normalized. Mr. Sepil now feels so ingrained in Kurdistan that he’s widened the company’s interests beyond business and into the community. It has just donated $20 million to the American University of Iraq in Sulaymaniyah.

If oil is the main driver of the Kurdish economy, then Genel is sitting firmly behind the steering wheel. The bridges are mended, and Genel counts on driving smoothly over them.

About

View all posts by