March 3, 2021

DealBook: Tony Hayward’s Firm to Buy Iraqi Oil Company in $2.1 Billion Deal

Tony Hayward, a former chief of BP, is set to become the head of Genel Energy.Sergei Karpukhin/ReutersTony Hayward, a former chief executive of BP, is set to become the head of Genel Energy.

6:14 p.m. | Updated

LONDON — Tony Hayward, who resigned as chief executive of BP amid the fallout from the Gulf of Mexico oil spill last year, is set to become the head of another oil company.

Vallares, the investment vehicle Mr. Hayward co-founded with the financier Nathaniel P. Rothschild this year, agreed on Wednesday to buy Genel Energy International, an oil producer in the Kurdistan region of Iraq, in a $2.1 billion deal.

Mr. Hayward will be chief executive of the new company, called Genel Energy. Rodney Chase, the former deputy chief executive of BP, would become chairman and Mr. Rothschild nonexecutive director.

Under the terms of the transaction, Vallares will issue $2.1 billion of new stock at £10 ($15.99) a share to acquire Genel in a reverse takeover. The owners of Vallares and Genel will own equal shares in the combined company. The Turkish billionaire Mehmet Karamehmet currently owns 56 percent of Genel, while the company’s chief executive, Mehmet Sepil, owns 29 percent.

The deal comes months after Vallares raised £1.35 billion ($2.1 billion) from investors through a London stock listing in June, with the expectation of buying oil and natural gas assets in Russia and the former Soviet states, the Middle East, Africa, Asia and Latin America.

Jalal Talabani, Iraq's president, with cane, shakes hands with executives from Genel Energy in 2009 to celebrate the start of oil exporting in Kurdistan.Safin Hamed/European Pressphoto AgencyJalal Talabani, Iraq’s president, with cane, shakes hands with executives from Genel Energy in 2009 to celebrate the start of oil exporting in Kurdistan.

Genel has stakes in two producing oil fields, a major natural gas discovery and significant exploration acreage in Kurdistan, the semiautonomous northern province of Iraq, Vallares said.

“Our investors are acquiring a strong existing business with excellent producing assets, a fine team of technical and operating staff already in place, and immense potential for future growth,” Mr. Hayward said in a statement on Wednesday. “The Kurdistan region of Iraq is undoubtedly one of the last great oil and gas frontiers.”

Mr. Sepil, who will become president of the new company, was fined £967,000 by the British financial regulator, the Financial Services Authority, in February 2010 for trading in Heritage Oil based on inside information about drilling tests.

The newly combined entity plans to file a prospectus in October, allowing it to move forward with its listing in London. The deal is subject to the approval of the Kurdistan government, which the company expects to receive later this month.

Following the transaction, the company plans to have sufficient funds “to participate aggressively in the significant consolidation we expect to see in the region over the next few years and to expand elsewhere if good opportunities arise,” it said in the statement.

This post has been revised to reflect the following correction:

Correction: September 7, 2011

An earlier version of this article misstated the date of a Financial Services Authority fine. It was February 2010, not this year.

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