Our oil reserves are being produced at some of the lowest costs in the industry and are cash flow breakeven at a Brent oil price of less than $20/bbl. The KRI gas development will also benefit from an industry leading cost structure. Our gas resources have been independently certified and are already committed by the KRI for export to Turkey, which will both diversify and lower the cost of energy imports.
As the economic situation in the region improves – driven by an improving oil price, increased oil exports, or KRG cost-cutting measures – regular export payments will facilitate the commercialisation of our gas assets. The clarity over the payment schedule for our oil exports allows us to explore and appraise, at low cost, a number of other exciting opportunities in our portfolio.
Our KRI gas business has the potential to generate a material and stable free cash flow stream once onstream. These cash flows, combined with those from the oil assets, will be redeployed to create value for shareholders in other upstream assets, or returned to shareholders if such opportunities don’t meet internal criteria.
Taking advantage of the significant flexibility in our portfolio, our exploration strategy has been reset to focus on lower-cost onshore potential within our existing KRI and Africa licences. Adding resource through exploration remains a key objective for Genel and we will continue to add new opportunities where appropriate.