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KRG Shaikan target at 55,000 b/d next year
London-listed Gulf Keystone Petroleum (GKP) said nameplate capacity at the Shaikan field in the semi-autonomous Kurdish region of northern Iraq could be increased to 55,000 b/d during 2019. It plans to boost production to 40,000 b/d "as quickly as possible."
Existing facilities can be debottlenecked to reach 75,000 b/d capacity, as a step towards the longer-term target of 100,000 b/d.
Production from the field is likely to average 27,000-32,000 b/d in 2018, down from some 35,300 b/d in 2017 and 31,600 b/d in the first quarter of this year. This year's decline is a result of the deferral of the 2017 investment plan because of uncertainties over payments from the Kurdistan Regional Government (KRG). But the signing of a crude sales agreement with the KRG in January has given the firm the confidence to prepare to restart investment in the field. That said, negotiations with the KRG have not yet concluded.
Rather than receiving a fixed monthly payment of $15mn, payments are now linked to international oil prices with a discount for export sales of $22/bl for quality and transportation. Receipts are now averaging $21mn/month.
The resumption of Shaikan crude exports through the pipeline to the Turkish port of Ceyhan after 10 months during which it was taken to Turkey by truck is evidence of the quality of the crude and its suitability for blending into the Kirkuk stream, GKP said. Shaikan is a heavy grade — 16-18°API with sulphur content of 4.8pc.
GKP has made its first profit since starting operations in northern Iraq — $14.1mn in 2017, against a loss of $17.4mn in 2016.
Existing facilities can be debottlenecked to reach 75,000 b/d capacity, as a step towards the longer-term target of 100,000 b/d.
Production from the field is likely to average 27,000-32,000 b/d in 2018, down from some 35,300 b/d in 2017 and 31,600 b/d in the first quarter of this year. This year's decline is a result of the deferral of the 2017 investment plan because of uncertainties over payments from the Kurdistan Regional Government (KRG). But the signing of a crude sales agreement with the KRG in January has given the firm the confidence to prepare to restart investment in the field. That said, negotiations with the KRG have not yet concluded.
Rather than receiving a fixed monthly payment of $15mn, payments are now linked to international oil prices with a discount for export sales of $22/bl for quality and transportation. Receipts are now averaging $21mn/month.
The resumption of Shaikan crude exports through the pipeline to the Turkish port of Ceyhan after 10 months during which it was taken to Turkey by truck is evidence of the quality of the crude and its suitability for blending into the Kirkuk stream, GKP said. Shaikan is a heavy grade — 16-18°API with sulphur content of 4.8pc.
GKP has made its first profit since starting operations in northern Iraq — $14.1mn in 2017, against a loss of $17.4mn in 2016.
11 April 2018
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