Gulf Keystone notes today’s update by MOL Hungarian Oil and Gas Plc., the operator of the Akri-Bijeel Block in the Kurdistan Region of Iraq (in which Gulf Keystone has a 20 per cent working interest), on its extensive exploration and appraisal programme.

Bakrman-1 Exploration Well Discovery

Bakrman-1, the first exploration well to target the Bakrman structure on the Akri-Bijeel Block, has made a new Triassic discovery. This is the second discovery on the block following the Bijell discovery made in 2010.

Bakrman-1 spudded in May 2012, 32 km to the north-west of the Bijell-1 discovery well. The well was drilled to a total depth of 4,100 metres in the Kurra Chine B formation in the Triassic, following which a well testing programme commenced, targeting reservoir zones in the Jurassic and Triassic. Two open hole tests and three cased hole tests have been performed to date. According to the operator, the second open hole well test performed at 3,930-4,100 metres MD (measured depth) in the Kurra Chine B formation in the Triassic resulted in calculated daily flow rates of approximately 2,616 barrels of light (32 to 35 degrees API gravity) oil per day and a gas rate of approximately 5.86 million standard cubic feet per day. The well testing programme is ongoing and is expected to be completed in April 2013.

Gulak-1 Exploration Well

Gulak-1, the fourth exploration well to be drilled on the Akri-Bijeel block and the first exploration well to target the Gulak anticline, spudded in July 2012 and has been drilled 21 km to the east from the Bijell-1 discovery well and 5 km to the south from the Bekhme-1 exploration well to a total depth of 3,641 metres in the Kurra Chine B formation in the Triassic. The well test programme, consisting of five tests, has now been completed. In the course of the DST#4 performed at 2,385-2,420 metres MD in the Sargelu and Naokelekan formations in the Jurassic, minor inflows of between 22-30 degrees API oil were encountered. Following the completion of the DST#5, it is proposed that the well will be suspended.

By John Lee.

Gulf Keystone notes today’s announcement by MOL Hungarian Oil and Gas Plc., the operator regarding the spudding of the Gulak-1 exploration well on the Akri-Bijeel block in the Kurdistan Region of Iraq.

Gulak-1 is the fourth exploration well to be drilled on the Akri-Bijeel block and the first exploration well to target the Gulak anticline at the extreme eastern end of the block.

The well is being drilled 21.4 km to the east from the Bijell-1 discovery well and 28.3 km to the east-southeast from the Bijell-3 (Aqra-1) appraisal well, which is also drilling ahead. Gulak-1 will target prospective intervals in the Jurassic and Triassic drilling to a planned total depth of approximately 3,658 metres in the Triassic Kurra Chine formation.

Gulf Keystone has a 20 per cent working interest in the Akri-Bijeel block, operated by Kalegran Ltd., a 100 per cent subsidiary of MOL Hungarian Oil and Gas Plc., which holds 80 per cent working interest in the block.

The operator’s P50 resource estimate for the Bijell discovery is 2.4 billion barrels of oil-in-place, while the ongoing 2012/13 exploration and appraisal programme is targeting existing and identified hydrocarbon prospects in the Akri-Bijeel block.

John Gerstenlauer, Gulf Keystone’s Chief Operating Officer commented:

“Gulak-1 is part of the operator’s extensive exploration and appraisal programme on the massive Akri-Bijeel block and the fourteenth well to be drilled across Gulf Keystone’s four blocks in the Kurdistan Region of Iraq. In addition to three wells currently drilling on the Akri-Bijeel block (Bijell-3, Bakrman-1 and Gulak-1), the programme also includes the drilling of three additional appraisal wells (Bijell-2, Qalati-1 and Qandagul-1).“

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Gulf Keystone has announced that it has appointed Strand Hanson Limited and Perella Weinberg Partners UK LLP as Joint Corporate Advisers with immediate effect.

Working alongside Strand Hanson, Perella Weinberg Partners will be jointly responsible for coordination of and advice on the sale of the Company’s 20 per cent working interest in the Akri-Bijeel block in the Kurdistan Region of Iraq, which is part of the Company’s Forward Strategy announced on 14 September 2011.

Gulf Keystone has a 20 per cent working interest in the Akri-Bijeel block operated by Kalegran Ltd., a 100 per cent subsidiary of MOL Hungarian Oil and Gas Plc., which holds an 80 per cent working interest in the block.

The operator’s P50 resource estimate for the Bijell discovery is 2.4 billion barrels of oil-in-place, while the ongoing 2012/13 exploration and appraisal programme is targeting existing and identified hydrocarbon prospects in the Akri-Bijeel block.

(Source: Gulf Keystone)

The Nabucco gas pipeline project is facing collapse, reports AFP.

The scheme to ship more than 30 billion cubic meters of gas per year from the Caspian and beyond to Europe, bolstering Europe’s energy security, may founder following Turkey’s decision to allow Russia’s rival South Stream project to run through its Black Sea waters. Construction of the 63 billion cubic meters (bcm) per year pipeline is planned to start by the end of this year.

Turkey also signed a deal with Azerbaijan to build the Trans-Anatolia Pipeline (TANAP) to carry 10 bcm per year of Azeri gas to European markets, plus 6 bcm for itself, casting further doubt on Nabucco which is having difficulty getting commitments of gas supplies.

Nabucco was to run some 3,900 kilometres (2,400 miles) across Turkey then up through Bulgaria, Romania and Hungary to reach Austria where it would link up with a major distribution network.

Necdet Pamir, a former deputy director of Turkey’s TPAO oil company, told AFP:

“The Nabucco project was in a coma long before the South Stream agreement, but nobody dares to say Nabucco is already dead.”

“Turkey was not completely onboard on Nabucco,” said Andrew Neff, senior energy analyst at IHS Global Insight, adding: “Turkey sees itself as a power arbitrator.”

“Nabucco has been an incomplete project since the very beginning,” said Mete Goknel, former director of Turkey’s state-owned pipeline company, Botas, which is one of the Nabucco consortium partners. “Who will ship the gas through the pipeline?”

Central Asia is Moscow’s backyard and Russia’s Gazprom has most supply tied up, while sourcing from Iraq’s northern Kurdistan region is fraught given the political frictions with the central government in Baghdad.

The main shareholders of Vienna-based Nabucco include Austrian energy company OMV, German utility RWE , Hungary’s MOL, Romania’s Transgaz , Bulgaria’s Bulgargaz, and Turkey’s Botas.

(Sources: AFP, Reuters)

Gulf Keystone CEO Todd Kozel (pictured) has told Reuters that the Kurdistan-focused oil explorer has interest for its 20 percent stake in the Arki-Bijeel block in the semi-autonomous region, but any sale was still in the preliminary stages:

“We’ve got a lot of interested parties, but we have not identified a purchaser. “We haven’t gone to the bidding process yet. It’s in the data room process, data gathering and identifying interest.“

The block in Kurdistan is estimated to hold around 2.4 billion barrels of oil and is operated by Hungary’s MOL.

“Kurdistan is the hottest play in town in the oil business,” Kozel said.

Kozel said Gulf Keystone was already fully funded to build a pipeline and would be “very well funded” for their budget with the asset sale they plan, but he said there were no plans to sell the company.

“Gulf Keystone is not for sale,” he said. “We have not been approached by any company making an offer.”

(Source: Reuters)

Excalibur is suing Gulf Keystone Petroleum (GKP) over Kurdistan’s 11-billion-barrel Shaikan oil field in a vigorously-contested lawsuit.

The company had a “collaboration agreement” with Texas Keystone, a private company owned by GKP’s chairman Todd Kozel and his brothers, giving it 30pc of fields won in any joint bids.

According to London’s Telegraph, Excalibur, which introduced Mr Kozel to Iraq, says it was therefore shocked when GKP struck a deal in November 2007 with Hungarian company Mol.

In the lawsuit, it emerges that GKP, Texas Keystone and Excalibur were all named on a draft bid for Shaikan – four months before the final deal.

GKP says the draft was shown to Kurdistan’s oil minister in July 2007 but the government did not want Excalibur to take part and made clear it was not eligible.

The case, due to be heard in London in October 2012 [corrected as per comment below from BT. Thanks! - Ed.], will have to determine whether GKP and Excalibur were contractually bound to bid as a consortium.

Excalibur insists it was understood that Texas Keystone was an “agent” of GKP, because a US company would be more attractive to Kurdistan than a Bermudan one. GKP is adamant that it was and is entirely separate.

GKP also says it gave Excalibur the opportunity to participate after November 2007, but it could not raise the money for a signing bonus.

Harvey Rands at Memery Crystal, which is acting for GKP, said:

“Excalibur refused to sign a contract with Gulf. After the Kurdish petroleum law was published, Excalibur realised and accepted it could not participate in a contract. The oil minister required Gulf to join with a very substantial partner, Mol. Excalibur was offered the chance to farm in but could not raise the necessary funds.“

Excalibur is expected to reply arguing it could not raise cash because GKP was refusing to confirm its stake.

(Source: The Telegraph)

CROSCO Integrated Drilling & Well Services Co., Ltd. is pleased to announce that wholly-owned subsidiary Rotary Drilling Company commenced with the provision of drilling services for Kalegran Limited, a wholly-owned subsidiary of MOL Hungarian Oil and Gas Company.

Drilling services are being provided with Rotary 2000 HP drilling rig Rotary 67 (pictured). The Bekhme 1 well, the first of a two firm well contract, is being drilled in the Akre-Bijeel [Akri-Bijeel] Block, Kurdistan Region of Iraq.

Igor Vrban, President of CROSCO explained:

“CROSCO is very pleased to be established in the Kurdish region of Iraq and to be providing drilling services to Kalegran. CROSCO’s subsidiary Rotary has established a branch office in Erbil and is actively pursuing drilling and oilfield service projects in the country and soon expects to mobilize additional equipment. The Kurdish region of Iraq and the entire country is a prime strategic growth pillar for CROSCO.“