City’s Turkish delight despite Genel Energy losses

Shares in Tony Hayward and Nat Rothschild’s Genel Energy venture recovered today after striking a gas-export deal with Turkey Energy Company.

The shares climbed 5p to 62.8p on hopes the deal will help improve the fortunes of the struggling oil firm.

The company, which Hayward chairs and Rothschild part-financed, is struggling to make its flagship oil field in Kurdistan work.

Genel had to write off £627 million of its exploration assets. That led to a loss of $1.2 billion (£965 million) for the year.

Genel said on Tuesday that reserves at its Taq Taq oilfield had been cut by around 66%, and that it would suspend the field’s full-year production target of 35,000 to 43,000 barrels per day, sending the shares falling.

Net debt rose to $241.2 million at the end of last year.

Analysts at Stifel said: “We do not think the business can support the amount of debt it carries.”

Hayward plans to step down as chairman in June, but the company has yet to find a successor. Industry reports say former BG Group boss Chris Finlayson is no longer in the running.