LONDON, Jan. 21 (UPI) -- Though expenses for the year will be cut to adjust for low oil prices, British explorer Genel Energy said Wednesday its Iraqi oil production was resilient.
"Our robust balance sheet, coupled with rising onshore oil production amongst the lowest cost in the world, and the significant financial flexibility in the portfolio, leaves us well positioned to continue to grow even in a period of sustained low oil prices," Chief Executive Tony Hayward said in a statement.
Most major energy companies have responded to the low price of oil by trimming capital expenses and workforce numbers for 2015. Hayward's company said it was trimming capital expenditure plans by 30 percent to $200 million and reducing its workforce to compensate for weak market conditions.
Headcount reductions and other cut backs should translate to a 40 percent decline in administrative expenses when compared with 2014, the company said. A non-cash exploration write off of $480 million for offshore operations in Angola, Malta and Morocco is expected as well.
Genel said it was basing its expense estimates on Brent crude oil priced at $50 per barrel, about 2.4 percent less than the current price for the March contract.
Genel focuses largely on operations in the Kurdish north of Iraq. The company said low development and operating costs means its Kurdish operations would remain resilient through 2015 despite lower oil prices.
The company said it produced an average 69,000 barrels of oil equivalent per day from the Kurdish north last year, a 58 percent increase year-on-year. "Significant" growth is expected in 2015.
The central government in Baghdad and the semiautonomous Kurdish administration recently brokered an oil export and revenue deal that ended a long stalemate over sector jurisdiction. Hayward said that deal is a win-win for all parties involved.
"The export route through [the Turkish port city of] Ceyhan is now well established, tanker liftings are frequent, and sales are regular and predictable," he said.