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Gulf keystone sees big oil moving into Kurdistan

Gulf-Keystone-big oil moving into Kurdistan

Says oil majors now "visible" in Kurdistan; Gets interest in Akri-Bijeel licence stake; Fully funded to end 2013 on current production level

May 29, 2012 12:23 by



Kurdistan’s plan to start oil exports to Turkey could make it attractive for more big oil players to try to move into the region, the head of Britain’s Gulf Keystone Petroleum told Reuters on Monday.

Iraq’s autonomous Kurdistan region has been locked in a long-running dispute with Baghdad over oil exports, inconveniencing oil firms that operate there and putting off others due to the complication of monetising huge oil finds made in the area.

Gulf Keystone’s Chief Executive Todd Kozel believes the stage is set for change, however, after Kurdistan earlier this month detailed plans to start exporting crude to Turkey by August 2013.

“This is the first I’ve seen of this kind of aggressiveness,” Kozel said in an interview.

“It’s finally showing an opening into the commercialisation phase. They laid out dates for the beginning and ending of those projects. They laid out quantities. It’s significant.”

Kurdistan, previously a no-go area for oil majors with contracts to develop Iraq’s southern oil fields, has increasingly been on the radar of the biggest oil companies after U.S. group ExxonMobil inked a deal to explore there in 2011.

Gulf Keystone, which estimates it has found around 10.5 billion barrels of oil at its giant Shaikan oil field, has been the subject of frequent rumours that Exxon is looking to acquire it.

“Is that possible in the future? Yes, anything’s possible, we’re a public company,” said Kozel when asked whether the company would still be independent in a year’s time.

“It’s life. I don’t know what’s going to happen tomorrow. Our plans are to keep our nose down and keep working.”

The dispute between Baghdad and the Kurdish capital Arbil is part of a broader political crisis in Iraq, where a fragile government of Shi’ite, Sunni and Kurdish blocs is struggling to overcome deep splits over power-sharing.

Baghdad says only the central government’s oil authorities have the right to control oil exports, and dismisses contracts signed with the Kurdistan Regional Government (KRG) as illegal, while the KRG says it has the right to develop its own oil fields.

Kozel added that oil majors were now “visible” in Kurdistan, and said “mostly large companies” were behind several indicative offers Gulf Keystone has received for a stake in the Akri-Bijeel licence in Kurdistan which it has put up for sale.

Finalisation of the sale, which the company said in January could raise up to $500 million, could come in the next couple of months, said Kozel, one of the UK’s highest paid executives whose earnings doubled to $20 million in 2011.

Gulf Keystone is targeting production of up to 40,000 barrels of oil per day (bopd) from its Shaikan field by the end of 2012.

Kozel said that Gulf Keystone, which has been the subject of internet gossips speculating on whether it will need to raise money, was fully funded to the end of 2013 at its current production level of 7,000 bopd and without any proceeds from the Akri-Bijeel stake.

Meanwhile, the firm continues to work to achieve its aim of moving to the main market of the London Stock Exchange from its current position on London’s junior AIM market, something which in February it said would happen in 2012.

“It’s a big process and a big procedure. It’s a much bigger job than we had thought but we’re working very hard towards it,” Kozel said, when asked when the move would take place.

Shares in Gulf Keystone, which have tumbled 57 percent since hitting an all time high in February, were trading down 1.1 percent to 197.75 pence at 1335 GMT on Monday, valuing the company at about 1.8 billion pounds ($2.8 billion).

($1 = 0.6396 British pounds)

(Editing by Mark Potter)



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