ShaMaran Petroleum and HKN Energy have struck a deal to buy out TAQA’s stake in the Atrush block, in Kurdistan.
Under the agreement, ShaMaran will increase its stake in Atrush from 27.6% to 50%. HKN will have an indirect stake of 25%, while the Kurdistan Regional Government (KRG) will have 25%.
ShaMaran CEO and president Garrett Soden said the deal was in line with the company’s strategy of consolidation in Kurdistan.
“We are acquiring TAQA’s 47.4% interest in Atrush and selling a 25% interest and operatorship to HKN IV,” he said.
The two companies already work together on the adjacent Sarsang block, where HKN is operator. “We look forward to working together at Atrush to realise significant synergies on both blocks.”
United Arab Emirates-based TAQA confirmed that its subsidiary, TAQA International, was selling out of the block. Atrush is the company’s only asset in the country.
The transaction is structured as two steps. First, ShaMaran’s General Exploration Partners subsidiary will acquire TAQA Atrush. When this step closes, HKN IV will begin operating Atrush on a fee basis.
The second step involves a transfer of 25% from TAQA Atrush to ShaMaran’s subsidiary. ShaMaran will also sell down a 25% stake to HKN, for a “nominal” consideration.
Both steps are subject to approval from the KRG.
HKN described HKN IV as a “sister company” and said that the deal would not have a direct impact on its operations. “Working together with ShaMaran, we expect to realise synergies and cost savings that benefit both the Sarsang and Atrush blocks. We anticipate a smooth transition without any interruption in petroleum operations”, the company said.
Production in Kurdistan is suffering as a result of the closure of a key export route through Turkey. There have been talks to reopen the facility but local operators have also been pushing for recognition from the federal government for their contracts.