British oil company Afren said it had agreed to buy stakes in two Iraqi Kurdistan operations for $588 million, extending the Africa-focused group’s reach into the Middle East.
Afren, whose main operations are in west Africa, said on Wednesday that it would buy a 60 percent participating interest in the Barda Rash production sharing contract and a 20 percent stake in one for the Ain Sifni operation in the Kurdistan region of Iraq.
“We are delighted to acquire a high quality portfolio of assets in the Kurdistan region of Iraq, covering the full exploration and production spectrum of development, etappraisal and low risk exploration upside,” Chief Executive Osman Shahenshah said in a statement.
“With a team in place, we expect to generate an incremental 75,000 barrels of oil per day net to Afren within five years from the Barda Rash field alone,” he added.
Oil firms’ confidence in the Kurdistan region of Iraq has been rising since May when producers in the region began to receive payments for oil exports, which restarted in February after years of wrangling between Baghdad and the Kurdistan Regional Government (KRG).
Iraq’s Kurdish region was little explored under Saddam Hussain’s regime but a number of large oil discoveries have been made there in recent years and proven reserves in the region are of the order of about 20-25 billion barrels.
Afren added it had secured a $200 million credit facility and would place up to 8.5 percent of its share capital in order to fund the acquisition.
Shares in Afren closed down 1.9 percent at 146.20 pence, valuing the company at 1.4 billion pounds ($2.3 billion).
