(Alliance News) - Genel Energy PLC on Friday said a new draft Bina Bawi production sharing contract is under negotiation with the Kurdistan regional government which would split oil and natural gas.
Shares in Genel were down 5.7% at 110.20 pence in London in morning trading.
Oil producer Genel received "extensive documentation" in mid-April from the government after achieving a commercial understanding in September 2019.
This newest documentation, which Genel said needs "further negotiation", includes a new draft production sharing contract seeking to split the Jurassic oil development form the deeper Triassic natural gas development. Oil would then be "developed on standard terms for the Kurdistan region of Iraq".
The Kurdistan regional government has said it does not plan to exercise notice of its intention to terminate the existing Bina Bawi contract.
Genel said it: "Continues to seek a viable and balanced commercial way forward for the development of Bina Bawi's gas and oil resources, and is constructively engaging with the [Kurdistan regional government] to accelerate progress".
Until additional tangible progress has been made on these negotiations, Genel plans to minimise its Bina Bawi spending.
By Anna Farley; annafarley@alliancenews.com
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Genel Energy (GENL)