Genel has revealed that oil Reserves in Iraqi Kurdistan are only half of what they originally proposed-now only 356 million barrels. This means that Genel Energy has already pumped over half of the oil reserves, and owe international operators billions in arrears.
Genel lost a third of its market value due to this revision in reservoir quantities. In addition, foreign investors such as Exxon Mobil and Chevron are no longer deeming Iraqi Kurdistan an alluring oil-rich opportunity to capitalise since unexpected amounts of water were encountered after closer inspection when attempting to get to the oil, making it more difficult to extract.
In combination with the political conflict, low crude oil prices, and downgrades in oil reserves, in addition to pipe outages (Ceyhan) Iraqi Kurdistan faces debt and internal strife.
"The recent reserve downgrades are another blow to optimism about Kurdish oil production," said Richard Mallinson, geopolitical analyst at consultancy Energy Aspects.
"While there are substantial amounts of oil in this underexplored province, companies are finding it is not as easy to find or produce in the quantities initially expected."
Yet some fields have been unaffected by revisions, such as Shaikan, operated by Gulf Keystone in the north of the region, saw its reserves upgraded last year to 639 million barrels (mmbbls). Chevron also continues to test wells in Sarta area.