Gulf Keystone Exits Mol Project to Focus on Kurdish Fields
Gulf will sell its 20 percent stake in the Akri-Bijeel block, with about 2.6 billion barrels of oil in place in the Iraqi region of Kurdistan, said Chief Executive Officer Todd Kozel. The company plans to pump about 15,000 barrels of oil a day by the end of the year and is designing a pipeline with at least 440,000 barrels-a-day capacity to connect its Shaikan field to the Kirkuk-Ceyhan export pipeline in 2013, he said.
“Kurdistan is a hot market in the merger and acquisition business,” Kozel said in a phone interview. “There will be a lot of international oil companies looking at the opportunity to purchase Akri-Bijeel and I don’t think we will be in a position of working too hard to find a buyer.”
Gulf, which plans to join the FTSE 250 Index next year, will focus on the Shaikan field development with 10 billion barrels of oil resources. Vallares Plc, a company founded by BP Plc’s former CEO Tony Hayward, is the latest entrant into Kurdistan exploration following Hess Corp. (HES), Murphy Oil Corp. (MUR), Marathon Oil Corp. (MRO) and Repsol YPF SA (REP), which secured projects in the region in the past 12 months.
“While we are drilling in Kurdistan we are discovering 23 million barrels of oil per day,” Kozel said. “That isn’t duplicated anywhere in the world.”
Gulf Keystone shares fell 1.2 percent to 179.25 pence in London trading. The stock has risen 29 percent this month.
“Progress has been swift and numbers look very encouraging, but the recent rapid rise in the share price suggests much has already been priced in,” Richard Griffith, a London-based analyst at Evolution Securities Ltd., wrote in an e-mailed report.
Oil exports, which were suspended last week because of mechanical disruptions, have resumed from Kurdistan, Kozel said. Gulf expects the Iraqi central government and Kurdistan Regional Government to overcome disagreements over a proposed petroleum law and complete the bill by the end of the year.
“While technical problems may have been the main cause, the new oil law, which the KRG have been extremely unhappy about, has also been an important factor,” Barclays Plc analysts Helima Croft and Amrita Sen said in a report e-mailed today. “Semi-autonomous Kurdistan insists that it has the legal authority to negotiate its own oil concessions and is seeking a larger share of the oil revenue that is divvied out by the central government.”
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