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Gulf Keystone eyes profits in Kurdistan exports

Gulf Keystone eyes profits in Kurdistan exports

Kurdistan continues to see investment as Gulf Keystone considers building a pipeline to commercialise its oil reserves in Iraq. The petroleum company expects profits once exports start.

April 12, 2011 12:37 by

Gulf Keystone Petroleum said it could swing to a profit next year if it begins exporting oil from Kurdistan as it considers building a pipeline to help it commercialise its huge oil reserves.

The company said its full-year pretax loss narrowed to $26 million from $96 million in 2009, after it switched its attention to the huge discovery it made at the Shaikan well in the semi-autonomous Kurdistan region of Iraq in 2009, and away from Algeria.

Gulf Keystone is currently working on upgrading its facilities to enable it to begin exporting oil from Kurdistan should payment issues around oil exports from the region be resolved.

“We are waiting on word from the Kurdistan Regional Government (KRG) as to whether we want to resume domestic sales or just hold tight until we’re able to export,” COO John Gerstenlauer said in a Reuters interview.

Should the company start exporting oil, it will likely become profitable.

“I would anticipate that based on the much larger volumes and the fact that we would be getting a world oil price rather than a domestic price we would have profit,” said Finance Director Ewen Ainsworth.

“But I would be a bit hesitant to say that means we would have profit next year,” he cautioned, adding that profitability would be determined by the numbers and timing involved.

Some companies began exporting oil from Kurdistan in February after years of wrangling between Kurdistan and Baghdad halted exports, but the key issue of payments is still not resolved.

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