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.

Gross production averaged 6,680 bopd in the first nine months of 2021, and 5,960 bopd in Q3. Production in Q3 has come predominantly from the Sarta-2 well, after the Sarta-3 well was taken offline at the end of Q2 in order to monitor and manage reservoir pressure in the thinner, volumetrically smaller Mus reservoir and water ingress from part of the deeper Adaiyah reservoir, both of which are informing the long-term production strategy for the field.

This strategy includes plans to convert the legacy Sarta-4 well into a water disposal well in Q1 2022 to optimise Sarta oil production. Q3 production has been in line with expectations for the Mus only reservoir accessible with the Sarta-2 well.

The Sarta-1D well is drilling ahead in the reservoir section with testing expected early in the new year, now via the production flowline, in order to accommodate the recent industry-wide directive from the Ministry of Natural Resources (‘MNR’) prohibiting the burning of oil during well test operations. Sarta-1D addition to the production stream is expected in Q1 2022.

The Sarta-5 well is set to enter the primary reservoir objectives imminently and testing will take place in Q1 2022 once the appropriate equipment is in place to comply with the MNR’s well testing directive.

The Sarta-6 well will spud once the Sarta-5 well has been drilled and completed. In line with the farm-in agreement Chevron is set to transfer operatorship of the field to Genel on 1 January 2022.