Gulf Keystone Keeps Production Target for Main Kurdistan Field

  • Kurdistan Oil Producer Expresses Confidence on Payment Restart
  • Payments, Domestic Sales to Allow for More Investments

Gulf Keystone Petroleum Ltd. reiterated its production forecast for its main oil field in the Kurdistan region of Iraq and expressed optimism about the resumption of export payments from local authorities.

“We are confident that our host government will be able to deliver on their recent pledge to establish a regular payment cycle for our crude from next month,” Chief Executive Officer Jon Ferrier said Thursday in a statement. “This will provide us with the necessary means to recommence investment into the field.”

Full-year production for its flagship Shaikan field will be 30,000 to 34,000 barrels a day, the company said. Gulf Keystone loss after tax widened to $77.7 million in the first half, from $29.8 million a year earlier.

The slump in crude prices over the past year has squeezed the budgets of Iraq’s federal and regional governments, preventing regular payments to Gulf Keystone and other exporters including Genel Energy Plc and DNO ASA. The Kurdish Regional Government said this month that it will start allocating part of the revenue from oil exports to producers on a monthly basis from September.

Producers in Kurdistan have also had to contend with attacks on the region’s main export route -- a pipeline to the Turkish port of Ceyhan. Interruptions to flows cost the Kurdish government $500 million in revenue since July 1, the Ministry of Natural Resources said Aug. 18.

Gulf Keystone shares have dropped 60 percent this year compared with a 22 percent drop in the FTSE 350 Oil & Gas Producers Index.

DNO Chairman Bijan Mossavar-Rahmani said last week that payments from the Kurdistan government to all companies operating in the region may be $75 million to $100 million a month, based on past experience.