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%.

Despite the significant operational challenges caused by COVID-19, including the closure of borders impacting supply chains and the movement of people into the KRI, work continued at Sarta throughout 2020. First oil production was achieved less than 21 months after the acquisition of the stake was completed.

The licence has significant potential, and work done in 2021 will help us understand the extent of this potential. Our estimation of reserves and resources at year-end 2021 will be updated following the assessment of three key inputs – ongoing analysis of existing data, pilot production, and the three high-impact appraisal wells being drilled.

A detailed re-evaluation of the seismic depth conversion and associated reinterpretation by Chevron, adopted by the joint venture for well planning purposes, has resulted in a significant upwards revision to the gross rock volume associated with the field. This will form the basis for future reserves and resources audit work.

Production from the Sarta pilot project continues to provide invaluable dynamic data from which we can plan future activities, and averaged over 7,000 bopd in H1 2021. June saw the highest average monthly production in the year to date, 8,400 bopd, following the maximisation of uptime in the month. Of this production, the Sarta-2 well produced c.6,400 bopd, and the Sarta-3 well c.2,000 bopd, with the latter having been partially plugged back to manage water ingress from the Adaiyah production stream, the origin of which is yet to be determined. With production temporarily limited to the thinner, less volumetrically significant Mus reservoir, a fall in pressure in June across both wells resulted in Genel and the operator, Chevron, reassessing the optimal way to produce these wells ahead of the addition of production from Sarta-1D, a well set to access production from the entire Adaiyah reservoir section for the first time and via a smart completion. Reservoir surveillance work at the start of the year had already proved strong communication between the Mus reservoir in Sarta-2 and the Mus reservoir in Sarta 3 over a short distance of c.3 km, together representing a portion of the container more limited than our expected extent of the Mus reservoir.

In order to analyse Mus pressure data and provide valuable learnings for longer-term field production, the Sarta-3 well was taken off line at the end of June for data gathering purposes. Since then, Mus pressure decline at the Sarta-2 well has in response slowed considerably, potentially indicative of secondary pressure support and associated oil influx.

To prudently manage the reservoir and associated production from the Pilot facility until Sarta-1D comes online around the end of the year, the joint venture partners plan to continue to manage the offtake from the Mus. This period offers multiple invaluable pilot data gathering opportunities to inform the longer term Sarta development plans.

The 2021 appraisal drilling campaign, which is targeting a material portion of the 250 MMbbls of contingent resources in the Jurassic, is now underway and is not impacted by the early results from the pilot production.

Preparations for Sarta-1D and the construction of a flowline linking it to the facility are well underway. The Viking Rig is mobilising to the location ahead of spud in the coming days, and clearing for the flowline is nearing completion. The Sarta-5 well spud in June, with results expected in late Q3/early Q4. This will be followed immediately by Sarta-6 with the same rig, with results now expected by late Q1 2022. In a success case, Sarta-6 will be bought onto production in short order via a flowline back to the facility, while Sarta-5 will be produced via a standalone temporary facility given its distance from the existing facility.