What is the duration of the Shaikan licence in the Kurdistan Region of Iraq and does its timeframe allow for the extraction of the quantities of hydrocarbons discovered?
The work on a development plan for the Shaikan block has just commenced, so the period of time required to extract the hydrocarbons has not yet been estimated. However, a rule of thumb is 10% to 15% per year of remaining developed reserves. The development period lasts for 20 years from declaration of a commercial discovery with an automatic extension of 5 years. The licence duration could be extended but would be subject to negotiation and agreement with the Kurdistan Regional Government.
What is your latest estimate of the Shaikan oil-in-place resources?
The latest figures were released in April 2011 following an upgraded third party assessment by Dynamic Global Advisors (DGA) (click here)
The Company firmly believes that the announcement in April 2011 of a major upward revision of the gross oil-in-place volumes for the Shaikan discovery, as calculated by DGA, is a significant confirmation of and improvement on the previous estimates by Gulf Keystone, DGA and Ryder Scott. The Company has indicated that these revised numbers for the Shaikan discovery may still be conservative.
Has Gulf Keystone started oil exports yet?
In June 2011, Gulf Keystone entered a commissioning phase of oil export operations from its Extended Well Test (EWT) facility close to Shaikan-1 and Shaikan-3 (click here).
The commissioning phase, involving final preparations and customary checks and tests on all elements of the process, including loading and transportation logistics, as well as metering and receiving facilities, is underway in order to enable the Company to steadily ramp up export volumes to 5,000 barrels of oil per day (bopd) with an eight month target of over 10,000 bopd.
How much does Gulf Keystone get paid for its crude sold on the domestic market?
As a very rough rule of thumb, the domestic oil price in the Kurdistan Region of Iraq is generally 50% or more below the international price for oil, i.e. approximately $30-40 per barrel. While Gulf Keystone’s initial focus was on selling oil on the domestic market, the Company is currently in a commissioning phase of oil export operations. Once oil exports at a stabilized rate of up to 5,000 barrels of oil per day have commenced, the Company will provide an update, including on the price received for the exported oil.
What pipeline is Gulf Keystone going to use for oil exports?
In preparation for higher production volumes and long-term exports, the Company has initiated preliminary studies on a new pipeline route to the existing main Kirkuk-Ceyhan oil export line. The pipeline study is viewed as a long-term initiative, while in the short to medium term Company will transport oil by road to an export handling facility for injection into the Kirkuk-Ceyhan export pipeline.
