Genel reached agreement to acquire stakes in the Chevron operated Sarta block, in the Kurdistan Region of Iraq, in January 2019. Production began in November 2020.

Genel acquired 30% equity in the Sarta licence by paying a 50% share of ongoing field development costs until a specific production target is reached, together with a success fee payable on achievement of a production milestone. Chevron retain a 50% interest in the Sarta licence and the Kurdistan Regional Government hold the remaining 20%.

Gross production averaged 5,380 bopd in H1 2022, 1,610 bopd net to Genel.

In the first half of 2022 we have sought to optimise production from existing Mus-Adaiyah take points at Sarta-1D, 2 and 3, diversify our source of production to add incremental barrels through two ongoing pilot production tests of the Najmah and Butmah reservoirs, while lifting the constraint of produced water storage through the successful, low-cost conversion of the legacy Sarta-4 site into a water disposal well.

As we explore avenues to optimise production, overall field production reduced to an average of c.4,000 bopd in June as Mus-Adaiyah production at Sarta-2 was temporarily suspended while we successfully gained access to and restimulated the Najmah reservoir. The Najmah is producing in line with initial expectations having recovered 70,000 incremental barrels of 15.5 API oil to date. At Sarta-1D a pilot production test of the Butmah (a new resource discovered by the Sarta-1D well) has been ongoing since early July. In line with the test results the interval has produced a mix of oil and water with 50,000 incremental barrels of 29 API oil recovered to date.

Plans are being crystalised to continue the Najmah production test through a recompletion at Sarta-3, planned for Q4 2022, allowing for higher volume Mus-Adaiyah production to resume from Sarta-2. To optimise Mus-Adaiyah production from Sarta-2 we are procuring Electrical Submersible Pumps that when fitted will add incremental barrels and maximise production under the steadily increasing water cut and declining pressures observed in that reservoir.

 

Alongside optimising pilot production, appraisal has been a key focus for this year. While the results of well testing at Sarta 5 disappointed, as a consequence of the poor reservoir quality intersected at this location, the multiple oil shows in combination with the oil recovered to surface from the Najmah demonstrate that there may be more to play for in this south-eastern portion of the licence and appropriate next steps in its appraisal are under consideration.

At Sarta-6, the second potentially high-impact appraisal well, the well has reached target depth, logging has been undertaken and the well is being completed. Testing is now set to begin in November, following a change to a more cost-efficient rigless testing model. Plans have been progressed to quickly capitalise on any success at Sarta-6 through immediately adding it to production. Should the well disappoint, focus will revert to maximising the value of the cash generative high-margin production in and around the existing production hub.

As we develop the field we will continue to focus on emissions. The installation of a solar panel and battery storage unit at the Sarta-1D wellsite completed in July. This development is intended to power production equipment at the site, which will reduce the use of diesel generators and therefore lower emissions.