(Bloomberg) -- Genel Energy Plc fell the most in more than a year in London trading after saying Iraq's Kurdish authorities plan to scrap its Bina Bawi and Miran natural gas projects.
The Kurdistan Regional Government has served notice of its intention to terminate both production-sharing contracts, Genel said Friday in a statement. The company sees “no grounds” for such a move, and will “take steps to protect its rights.”
The KRG's plan is a further blow to the producer, which has been unable to unlock vast gas resources at the fields after talks over their development stalled. Bina Bawi and Miran contain an estimated 14.8 trillion cubic feet of raw gas, which Genel planned to export to a growing market in Turkey. They also hold 130 million barrels of oil and condensate resources.
The shares sank as much as 16%, the most since March 2020, to trade at 114 pence. The stock was at 115.8 pence as of 10 a.m. London time, the lowest since November.
The company is already contending with slower repayments from the KRG for past oil sales after the authorities made changes to the schedule several months ago. That's put pressure on its shares, which are down 20% this year despite a revival in crude demand and prices following 2020's market collapse.
Genel has been limiting investments in Bina Bawi and Miran, which are both still in pre-production stage, given the uncertainty over their future. The company reached a “commercial understanding” with the KRG to develop the fields two years ago, with the government committing not to serve any notice of termination while negotiations continued, according to Friday's statement.
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