Further to reports in the media this week, Gulf Keystone (GKP), operator of the Shaikan Field in the Kurdistan Region of Iraq, is today clarifying certain points regarding the marketing of Shaikan crude.
Recent media does not correctly represent the views of the Company and its Executives. The inference is that the company does not know where the Shaikan oil is exported or sold to. This is wrong. The company is fully aware that MNR have a number of international agreements with reputable trading houses for both the trucked Shaikan crude and the blended crude exported through the pipeline to Ceyhan.
In addition, the impression was wrongly given that the MNR was losing out financially by taking the Shaikan crude out of the pipeline. The pipeline exports to Ceyhan without the Shaikan crude is now sold at higher prices by the KRG, and for the export of Shaikan crude by truck the KRG are still achieving similar netback prices as before, therefore these new export arrangements have an economic benefit to the KRG as more value is realised overall.
The Kurdistan Regional Government's Ministry of Natural Resources ("MNR") is exporting all Shaikan crude production via trucks to Turkey in accordance with its stated policy of crude oil export quality management, and better pricing realisation. Shaikan export levels remain steady at ca 38,000 barrels a day. These trucking exports represent an important milestone by establishing a standalone export market for the Shaikan crude.
As previously confirmed, the economic benefit to the Company will be the same as that of the previous framework.
We apologise, in particular to the KRG/MNR, for any confusion and misunderstanding caused.