Genel confident on Iraqi Kurdistan oil payments despite tensions

In August, Genel and fellow oil producer DNO from Norway struck deals with the KRG to clear outstanding debt and restructure oil export payments. (Reuters)
Updated 19 October 2017
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Genel confident on Iraqi Kurdistan oil payments despite tensions

Genel Energy said it was confident the semi-autonomous Kurdistan Regional Government (KRG) in Iraq will continue meeting oil export payments despite tensions with the central government following the region’s independence referendum last month.
Genel, one of a handful of foreign oil producers in Iraqi Kurdistan, has seen its share price drop nearly a quarter since the September 25 vote for Kurdish independence from Iraq, which the central government and western powers have opposed.
Iraqi forces have since taken control of some of Kurdistan’s biggest oilfields and operations were interrupted for the first time on Wednesday when oil exports through the Kirkuk-Ceyhan pipeline to Turkey more than halved.
However, Genel said on Thursday its own operations were continuing as normal and that it had not increased security at its sites.
“Our operations continue as usual, staff rotations continue, spare parts are coming in when needed. It’s very much business as usual,” Esa Ikaheimonen, Genel’s newly appointed chief financial officer, told Reuters.
He declined to comment on the status of the Kirkuk-Ceyhan pipeline.
Ikaheimonen said he was confident the KRG would continue meeting payments for oil exports. The payments are Genel’s main source of revenue for oil it produces at the Taq Taq and Tawke oilfields.
In August, Genel and fellow oil producer DNO from Norway struck deals with the KRG to clear outstanding debt and restructure oil export payments.
The companies have since received the first payments under the new structure.
“They’ve (been making payments) flawlessly for two years now and in addition to that they’ve also been extremely cooperative in finding solutions for the settling of problems,” he said.
“That gives us quite a lot of confidence that the desire is there and the commitment is there.”
A slight rise in oil prices, the KRG payments and ongoing revenue from production helped Genel to increase cashflow in the third quarter with unrestricted cash balances at $268 million at the end of September, up from $246 million three months earlier, the company said in a trading update published on Thursday.
This also enabled it to reduce net debt by 13 percent over the quarter to $138 million.
Average output stood at 33,810 barrels per day (bpd) in the quarter, compared with an average of 37,100 bpd in the first half of the year.
Shares in Genel were up 2 percent at 0758 GMT.
“Macro events are likely to remain the major driver of the stock in the near-term,” said analysts at Numis.


Japan prosecutors charge Kobe Steel in fake data scandal

Updated 12 min 56 sec ago
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Japan prosecutors charge Kobe Steel in fake data scandal

TOKYO: Japanese prosecutors charged major steelmaker Kobe Steel Thursday with violating laws overseeing competition in a massive faking of product data.
Kobe Steel, which has repeatedly apologized for the practice, said in a statement that it took the allegations seriously and was working to prevent a recurrence.
“We once again deeply apologize,” it said, without elaborating on specific charges. “The entire Kobe Steel Group is working together sincerely.”
The systematic misconduct spanned years, affecting products sent to more than 680 companies, including aluminum castings and copper tubes for autos, aircraft, appliances and trains.
The scandal, which surfaced last year, has set off a class-action lawsuit and an investigation in the US.
Kobe Steel has said a zealous pursuit of profits, unrealistic targets and an insular corporate culture were behind the scandal.
There have been no reports of accidents or injuries related to the fake data.
Charges were not filed against any individuals, though the company has said managers who knew of the wrongdoing intentionally looked the other way.
The systematic faking of data took place at various plants throughout Japan, according to the prosecutors and the company. Kobe Steel launched an internal investigation and released the findings earlier this year.
The scandal was a major embarrassment for a famous brand in a nation built on quality “monozukuri,” a phrase likening manufacturing to a craft or a science.
Kobe Steel has promised each employee will return to “the roots of monozukuri” to win back trust.
If found guilty in a court, the company could be fined. It is not clear how much.
The chief executive at Kobe Steel and several other executives resigned over the scandal. Some managers took pay cuts.
Quality control woes have been rife at other top Japanese brands, including Nissan Motor Co. Nissan has acknowledged that illegal vehicle inspections occurred for years at its plants in Japan.