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Gulf Keystone expects Kurdish field oil output at top end of range

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Gulf Keystone expects Kurdish field oil output at top end of range


Shaikan's 2020 average output forecast to exceed 36,000 b/d

Some work on field suspended in March due to pandemic

Original target was 55,000 b/d in Q3 2020

Dubai — Gulf Keystone Petroleum, the energy company focused on Iraq's semi-autonomous Kurdistan region, expects oil output from Shaikan field at the top end of its September guidance following progress in operations that were suspended in March due to the coronavirus outbreak.

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"Following on from the successful work-over of the SH-12 well, the company has progressed the previously announced low-cost, high-impact investments to further increase field production," Gulf Keystone said in a statement Dec. 15. "GKP is well positioned to restart its drilling program to achieve 55,000 bopd when circumstances permit."

Current gross production from Shaikan is around 42,000 b/d, or 20% above the November average rate, the company added.

Average gross production for 2020 will be "slightly above" 36,000 b/d, the top end of the guidance that was first disclosed in September. The company expects a further increase in production in the first quarter of 2021, but it didn't say to what level.

In March, Gulf Keystone cautioned that it may not be able to meet its production increase target of 55,000 b/d slated for the third quarter of this year and average production of 43,000-48,000 b/d for 2020 due to the pandemic and near lock-down in Kurdistan.

Kurdistan arrears

The SH-12 well returned to production on Nov. 15 and was producing at a stable rate of over 5,000 b/d, the company said Nov. 23.

Gulf Keystone said the Kurdistan Regional Government has proposed to settle it arrears now that oil prices have reached $50/b.

"In line with the KRG's commitment to review the outstanding November 2019 to February 2020 invoices totaling $73.3 million (net) when oil prices reached $50/barrel, we are pleased to confirm receipt of a proposal to repay the arrears," the company said.

In April, the KRG said it would defer payment relating to oil sales from November 2019 to February 2020 for at least nine months as low oil prices put a huge strain on its finances.

Kurdish exports rose to 426,000 b/d in November, from 416,000 b/d in October, according to data from State Oil Marketing Organization released Dec. 14.