Genel shares slide by 41% as it halves estimate for Iraqi oilfield reserves

Taq Taq oilfield in Kurdistan contains only about half the oil it previously claimed (Getty)

The former BP boss, Tony Hayward, presumably hoped that his return to the energy industry after his much-criticised management of the oil giant’s Deepwater Horizon disaster would be a more positive period of his life.

But that has taken a sharp knock after Genel Energy, the firm he co-founded and now chairs, admitted that its main Taq Taq oilfield contains only about half the oil it previously claimed.

The company revised down reserves held within the oilfield to 356 million barrels from a 683 million-barrel figure given in 2011. That meant a £1bn write-down on the value of the Iraq oilfield.

The revision prompted a massive stock market slump, with shares in the company closing 41 per cent down on the day, dropping by 50.75p to 74p. That meant a paper loss of £750,000 to Mr Hayward, who moved up from chief executive to chairman of the company last July.

Meanwhile, his co-founder, the financier Nat Rothschild, took a much bigger financial hit of £11m on his 8.9 per cent share of the company.

Mr Hayward was replaced as chief executive by Murat Ozgul, formerly the head of Genel’s operations in its core business in Turkey and Kurdistan. Back in 2010, Mr Ozgul was fined £105,240 by the Financial Services Authority for insider trading in London-listed Heritage Oil, although at the time the watchdog said it recognised that he had not set out to commit market abuse.

The news came a month after the Kurdistan oil firm warned that revenues would be lower than expected but comes ahead of Thursday’s 2015 results.

It is yet another blow for the London-listed business, which has been blighted by numerous delayed payments for oil exports as the Kurdistan government struggles to finance its war with Isis. It has also been hit by the general slump in the oil price.

Talking to analysts yesterday, Mr Hayward remained bullish, insisting that the news was not fatal for the company. “This is a very disappointing day for myself and the team,” he said. “But it is also important to recognise that while this is a major setback, it is by no means the end of Genel.”

Genel Energy was formed from the $2.1bn merger of UK-based Vallares Plc with Turkish-based Genel Enerji in 2011. It was one of several companies that headed to Kurdistan after the 2003 Iraq invasion in the hopes of benefiting from easily extracted oil. Others, such as Gulf Keystone Petroleum and DNO, have equally struggled to get payments from the Isis-fighting Kurdistan Regional Government.

Five years since the creation of Genel, the question now is whether Mr Rothschild and Mr Hayward will accelerate the search for a buyer to end their misery.