Equity
Turkey, Kurdistan close to pivotal energy deal, positive for Hungary's MOL
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The proposed deal would seek to create a new “energy corridor" that by the end of the decade could send Turkey as much as 3 million barrels a day of oil and 10 bn cubic metres of natural gas a year.
People close to the negotiations said the deal would set up a new company controlled by Turkey’s state-owned oil and gas companies, which would then acquire the rights for five exploration blocks in the Kurdish region. A person familiar with the talks said some of the blocks it is entering are those acquired by ExxonMobil last year.
“Citing four senior Turkish officials the Washington Post reported two days ago that negotiations between Turkey and the KRG on a pivotal oil deal had entered the final stages. Hence this latest piece of news is unlikely to be completely fresh for the market," commented Péter Császár, research analyst at KBC Securities in Warsaw.
He also noted that the deal is surrounded by various complexities, such as “heightened tensions between Ankara and Baghdad; US opposition to any deal which may threaten the unity of Iraq and push Iraqi Prime Minister Nouri al-Maliki closer to Iran; the potential disintegration of Iraq could create the prospect of a greater independent Kurdistan, destabilizing the largely Kurdish southeast of Turkey etc."
“As a result, the positive impact on MOL’s and Tupras’ share prices is likely to be muted for now. Nevertheless, a sealed deal would certainly help the political derisking of MOL’s position in Kurdistan, which is worth up to USD 2.8bn (or HUF 6,288 per share). The deal would also be positive for Tupras, which could further diversify its crude acquisition sources and replace the missing barrels from Iran," Császár concluded.
People close to the negotiations said the deal would set up a new company controlled by Turkey’s state-owned oil and gas companies, which would then acquire the rights for five exploration blocks in the Kurdish region. A person familiar with the talks said some of the blocks it is entering are those acquired by ExxonMobil last year.
“Citing four senior Turkish officials the Washington Post reported two days ago that negotiations between Turkey and the KRG on a pivotal oil deal had entered the final stages. Hence this latest piece of news is unlikely to be completely fresh for the market," commented Péter Császár, research analyst at KBC Securities in Warsaw.
He also noted that the deal is surrounded by various complexities, such as “heightened tensions between Ankara and Baghdad; US opposition to any deal which may threaten the unity of Iraq and push Iraqi Prime Minister Nouri al-Maliki closer to Iran; the potential disintegration of Iraq could create the prospect of a greater independent Kurdistan, destabilizing the largely Kurdish southeast of Turkey etc."
“As a result, the positive impact on MOL’s and Tupras’ share prices is likely to be muted for now. Nevertheless, a sealed deal would certainly help the political derisking of MOL’s position in Kurdistan, which is worth up to USD 2.8bn (or HUF 6,288 per share). The deal would also be positive for Tupras, which could further diversify its crude acquisition sources and replace the missing barrels from Iran," Császár concluded.
