Gulf Keystone plans Shaikan field restart in Iraq

Gulf Keystone Petroleum Ltd. plans to restart production in Shaikan field in the Kurdistan Region of Iraq after the Kurdish Regional Government (KRG) announced that it had reached an agreement with the Iraqi government to allow resumption of oil exports through Turkey.

Production from Shaikan field remains shut-in following the suspension of exports and closure of the Iraq-Turkey Pipeline on Mar. 25, 2023. The suspension has resulted in a gross production deferment to date of around 4.3 million bbl, or about 11,800 bo/d on a full-year basis.

Almost all operational activity in the field has stopped since the pipeline closure to preserve liquidity. All drilling and well workover activity was halted, and the drilling rig was released following the completion and hook-up of SH-18. All expansion activity was suspended, including installation of water handling equipment.

The company said it is progressing critical safety upgrades and maintenance activity and is exploring opportunities to sell Shaikan crude to local buyers.

Gulf Keystone expects that suspension of exports will be temporary and that the KRG will resume more normalized payments. The KRG has officially requested Turkish authorities to allow Kurdistan’s oil exports via the country's Ceyhan port.

While no official timeline to restart pipeline operations has been announced, production is ready to resume, and logistics are in place to quickly restart trucking operations, according to Gulf Keystone.

Shaikan field had produced more than 100 million stock tank bbl as of February 2022 and has estimated gross 2P reserves + 2C resources of 798 million stock tank bbl.

Gulf Keystone is operator in the Shaikan license (80%) with partner Kalegran BV (20%), a subsidiary of MOL Hungarian Oil & Gas PLC.