Gulf Keystone Petroleum is the operator of the Shaikan Field, situated about 60 km to the north-west of Erbil covering an area of 280 km². The Company has a Production Sharing Contract with the KRG and has an 80% working interest in the Shaikan licence.
Production facility with current production capacity of 27,500 bopd. Debottlenecking activities remain on track to further increase production capacity to over 30,000 bopd in Q1 2021. Since December 2019, all oil produced is exported via pipeline. Six production wells are currently tied-in to PF-1, with no artificial lift.
- SH-10 & SH-11
Production facility with current nameplate capacity of 20,000 bopd, expected to increase to 27,500 bopd with the recommencement of drilling activities. Since July 2018, all oil produced is exported via pipeline. Five production wells are currently tied-in to PF-2, with one on artificial lift.
Shaikan – a giant field with proven production track record
The Shaikan Field is one of the largest oil discoveries in the Kurdistan Region of Iraq and has been in production since July 2013. To date, the field has produced in excess of 85 million stock tank barrels (“MMstb”). A Competent Person’s Report was prepared by ERCE Equipoise as at 31 December 2020 confirming estimated gross 2P reserves + 2C resources of 798 MMstb. GKP has a vision to grow production in phases to 110,000 bopd over the coming years.
Before the suspension of the activity programme in March 2020, due to COVID-19, work was ongoing to increase production to 55,000 bopd. With today’s improved operating environment, GKP was pleased to announce in March 2021 it is resuming the 55,000 bopd project and is targeting to restart drilling activities in Q3 this year and to ramp up production towards 55,000 bopd in Q1 2022.
- Located c.60km north-west of Erbil in the north-west Zagros fold-belt
- One of the largest fields in Kurdistan by reserves and production
- Cumulative production to date of over 85 MMstb (Jurassic)
- Steady production; pressure decline in line with predictions
- Significant growth potential
- Material oil volumes in the Cretaceous, Jurassic and Triassic formations
- Current production from Jurassic only
- Staged approach to de-risk field long-term potential
- Focus on costs – c.$3/bbl Opex mid to long-term
- Scope to optimise as the field is further developed
Key information (gross figures)
- Gulf Keystone interest: 80%
- Partner: MOL 20%
- Discovered: August 2009
- Production start: July 2013
As at 31 December 2020
- 1P reserves: 240 MMstb
- 2P reserves: 505 MMstb
- 2C resources: 293 MMstb
- Petroleum cost pool: c.US$500m gross
Shaikan production growth as at March 2021
The Company made significant progress on facilities debottlenecking and drilling activities in 2020. The Company was on-track to achieve its 55,000 bopd expansion target in Q3 2020, but due to the COVID-19 pandemic the expansion project was suspended in March 2020. Despite recent challenges, production operations have continued safely and reliably throughout the period.
Since September 2020, GKP has grown production, through a number of quick payback projects. The first was the hook-up of SH-9 with this well being brought on stream as an oil producer in December. The other two initiatives were the re-completion of SH-12 in the main Upper Jurassic reservoir and the further debottlenecking of PF-1 to increase production capacity beyond the 27,500 bopd anticipated in the 55,000 bopd project, to over 30,000 bopd. These initiatives increased gross production at Shaikan by approximately 9,000 bopd for a total cost of less than $3 million gross. This led to GKP recording its highest ever monthly production average of 44,405 bopd in January 2021.
Plant availability remained high during 2020 and the Company achieved average gross production of 36,625 bopd, exceeding the top end of the revised guidance range and the highest annual average production rate to date from the field.
The Company has set the target of achieving average daily gross production guidance of 40,000 to 44,000 bopd in 2021. To date, GKP is on track to meet this guidance, having delivered average production for the year to 29 March 2021 of 43,190 bopd.
With macro conditions improving, GKP is pleased to resume the 55,000 bopd expansion project, with drilling operations expected to begin in Q3 resulting in an increase in gross production towards 55,000 bopd in Q1 2022.
Note: 1) Monthly average as at 29 March 2021
February 2021 – Planned well servicing campaign
December 2020 – SH-9 brought on production
November 2020 – Completion of SH-12 workover
July 2020 – Maintenance repairs at PF-1
March 2020 – Suspension of expansion activities
December 2019 – Start of PF-1 export via pipeline & SH-12 well first oil
October 2019 – PF-2 planned shutdown for maintenance and debottlenecking
June 2019 – PF-1 planned shutdown for maintenance and debottlenecking
May 2019 – SH-3 workover completed
February 2019 – SH-1 workover completed & export pipeline shutdown
Gross reserves and resources based on the Company’s estimates at 31 December 2019 and the CPR at 31 December 2020 were:
|31 December 2020||1P||2P||2C1||2P+2C2|
|31 December 2019||1P||2P||2C1||2P+2C2|
The reconciliation of changes in reserves and resources between the Company’s estimates at 31 December 2019 and the CPR at 31 December 2020 is as follows:
|31 December 2019||194||578||239||817|
|31 December 2020||240||505||293||798|
GKP’s 80% net WI3 share of reserves and resources at 31 December 2020 were:
|Formation (80% WI (MMstb)||Reserves||Resources|
|Total - Net WI||192||404||234||638|
1) Contingent resources volumes are classified as such because there is technical and commercial risk involved with their extraction. In particular, there may be a chance that accumulations containing contingent resources will not achieve commercial maturity. The 2C (best estimate) contingent resources presented are not risked for chance of development.
2) Aggregated 2P+2C estimates should be used with caution as 2C contingent resources are commercially less mature than the 2P reserves.
3) Net working interest reserves and resources do not represent the net entitlement resources under the terms of the PSC.
Vision to develop Shaikan
Phased approach provides flexibility to time capital investment