Last checked at 23 Feb 2017 07:03
23 February 2017
Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone", "GKP" or "the Company")
Shaikan Crude Export Route Update
Gulf Keystone, operator of the Shaikan Field in the Kurdistan Region of Iraq, is today providing an update on the Shaikan crude export route.
The Kurdistan Regional Government's Ministry of Natural Resources ("MNR") is to begin exporting all Shaikan crude production via trucks to Turkey, from the end of February. Subsequently, no Shaikan crude will be injected into the Kirkuk-Ceyhan export pipeline at Fishkhabour, until further notice by the MNR. The Company has been informed that the new arrangement is required by the MNR for its overall crude oil export quality management and is expected to be temporary. It is not expected to affect Shaikan production levels.
Under the new arrangement, the MNR has confirmed to Gulf Keystone that the economic benefit to the Company will be the same as that of the previous framework, whereby all Shaikan crude was exported via pipeline to Ceyhan. The MNR has also confirmed its intention to take full responsibility, at its sole cost on a non-rechargeable basis, for the additional transportation costs related to this new export route arrangement, and that the Company will continue to receive a fixed payment of gross $15 million per month for sales of the crude. This agreement will remain subject to future audit and reconciliation.
Gulf Keystone continues its ongoing discussions with the MNR regarding commercial and contractual conditions, in particular those around a regular and timely payment cycle, and long-term crude marketing arrangements. Subject to further clarity on these points, the Company looks forward to making further investments to maintain at least plateau production at nameplate capacity of 40,000 bopd, with a view to increasing to 55,000 bopd as soon as possible.
Jón Ferrier, Chief Executive Officer, said:
"This new export route arrangement confirms there is a market for Shaikan crude as a standalone product while also ensuring Gulf Keystone, and our partner MOL, remain financially and commercially neutral under this arrangement. We continue an active dialogue with the MNR to achieve satisfactory commercial and contractual clarity around payments and marketing which remain key to achieving production growth and realising full value potential."
Enquiries:
Gulf Keystone Petroleum: | +44 (0) 20 7514 1400 |
Jón Ferrier, CEO | |
Sami Zouari, CFO | |
Kate Leslie, Corporate Communications Manager | |
Celicourt Communications: | +44(0) 20 7520 9266 |
Mark Antelme Jimmy Lea |
or visit: www.gulfkeystone.com
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
Notes to Editors:
· Gulf Keystone Petroleum Ltd. (LSE: GKP) is a leading independent operator and producer in the Kurdistan Region of Iraq and the operator of the Shaikan field with current production capacity of 40,000 barrels of oil per day
· Further information on Gulf Keystone is available on its website www.gulfkeystone.com
Disclaimer
This announcement contains certain forward-looking statements that are subject to the risks and uncertainties associated with the oil & gas exploration and production business. These statements are made by the Company and its Directors in good faith based on the information available to them up to the time of their approval of this announcement but such statements should be treated with caution due to inherent risks and uncertainties, including both economic and business factors and/or factors beyond the Company's control or within the Company's control where, for example, the Company decides on a change of plan or strategy. This announcement has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. This announcement should not be relied on by any other party or for any other purpose.