13th Jun 2014 07:50
LONDON (Alliance News) - Gulf Keystone Petroleum Ltd Friday said it continues to be alert to the deteriorating security situation in Iraq but its operations in the Kurdistan region of the country are progressing in line with its previous guidance to reach 20,000 gross barrels of production by the end of the second quarter 2014.
"Our operations in the Kurdistan Region of Iraq are progressing in line with our previous guidance, whilst we remain alert to the current security situation in Iraq, which has recently escalated outside the Kurdistan Region," Chief Executive Todd Kozel said in a statement Friday.
The oil and gas exploration and development company said development plans to increase production capacity at its entire Shaikan field to 40,000 gross barrels of oil per day by the end of 2014 are on track, with June 4 cumulative production reaching a record maximum daily rate of 25,000 gross barrels of oil per day.
The company said its Shaikan PF-1 production facility continues at stable rates of 16,000 gross barrels per day, from three wells, and should increase to 20,000 later in 2014.
The company's Shaikan PF-2 production facility has been fully commissioned and production operations have started from two wells, Shaikan-5 and Shaikan-2.
Gulf Keystone said trucking operations from PF-1 are continuing and PF-2 production is being processed and flowed into two storage tanks at the facility, with trucking operations expected to start by the end of June.
The company said the majority of its production is being trucked to the Turkish port of Dortyol and sold to the international market, but some sales into the domestic market are continuing despite the unrest in Iraq.
It added that in June so far it has received its second and third payments of USD6.9 million each for Shaikan exports, as well as a further payment of USD1.5 million for its domestic sales.
Iraq is facing a crisis as insurgents from a group called the Islamic State in Iraq and the Levant have taken control of the major Iraqi cities of Mosul and Tikrit and are believed to be planning a major push further south towards Baghdad, destabilising the troubled region and driving up oil prices.
However, on Friday, local officials said Kurdish military forces have repelled an offensive by the insurgents, who mounted an overnight attack at a security checkpoint on the outskirts of Diyala province north of Baghdad.
"The Peshmerga are now fully responsible for security in the area after army and police units withdrew from their posts," local official Anwar Hussein told independent news site Alsumaria News, referring to the Kurdish military forces.
In Washington, President Barack Obama said Thursday that the US was "looking at all the options" to help the Iraqi government. The State Department said that this did not include sending US troops, all of whom were pulled out of Iraq in late 2011 after an eight-year occupation following the 2003 invasion.
Gulf Keystone operates in the far northern Kurdistan region of Iraq near the border with Turkey, where other producers such Afren PLC and Genel Energy PLC also operate.
Despite each of these companies seeing share price falls during the week as the ISIL insurgents advanced through Iraq. Gulf Keystone shares were up 1.4% to 81.12 pence early Friday, while Genel Energy shares were up 0.2% to 973.50 pence and Afren shares were up 0.3% to 142.30 pence.
By Tom McIvor; [email protected]; @TomMcIvor1
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