Kurdistan oil firms crash as Iraqi militants edge closer
SHARES in Kurdistan-focused energy explorers plunged yesterday as Sunni Muslim jihadi group Isis edged closer to the autonomous region’s oil reserves.
London-listed Gulf Keystone Petroleum and Genel Energy closed 11.4 per cent and 10.1 per cent lower respectively, after it emerged that Isis had seized at least three more towns near Kurdistan.
Both companies have so far insisted that operations have been unaffected by the unrest in northern Iraq, but there are growing concerns about risks to the Kurdish-controlled territory, which has previously been seen as relatively stable.
International oil majors Chevron and Exxon Mobil said yesterday they were evacuating staff from Kurdistan as the jihadis advanced.
A number of companies have expanded into the region in recent years, hoping to tap into its lucrative oil reserves.
A long-running dispute with the Iraqi central government over payments has so far prevented Kurdistan from exporting its oil, but this year it is pushing ahead with plans to sell crude to the international markets regardless.
Isis jihadis took over Iraq’s second largest city Mosul in June, escalating tensions that had been simmering for months.
Fears that the unrest would hit production caused the price of brent crude to rise above $115 (£68) a barrel, but it has since slumped to around $105 a barrel as production was unaffected.
Bank of America Merrill Lynch research last month warned that the market was being “complacent” and said too little risk was being priced in. “We believe the turmoil has caused a significant increase in geopolitical risks, which markets keep ignoring,” said the bank’s analysts.
Separately, Gulf Keystone Petroleum said yesterday that it had hired two new non-executive directors with immediate effect.
Dr Joseph Stanislaw has spent the past three decades as a senior adviser within the energy industry and V Uthaya Kumar is a former senior partner at accountancy firm PwC.
“Both bring skill sets honed over long and distinguished careers in their respective fields which complement the existing team,” said chairman Simon Murray.