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 nameplate capacity of 20,000 bopd is expected to increase to 27,500 bopd in 2020. Since December 2019, all oil produced is exported via pipeline. Five production wells are currently tied-in to PF-1, with no artificial lift.
- SH-10 & SH-11
Production facility with a nameplate capacity of 20,000 bopd is expected to increase to 27,500 bopd in 2020. 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 70 million stock tank barrels (“MMstb”) and has estimated 2P reserves of 578 MMstb, as at 31 December 2019. GKP has a vision to grow production to 110,000 bopd over the coming years.
Before the suspension of the activity programme, work was ongoing to increase production to 55,000 bopd with longer-term potential to increase output to 110,000 bopd, by way of a phased investment programme.
- 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 70 MMstb
- 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
- 1P reserves: 194 MMstb
- 2P reserves: 578 MMstb
- 2C resources: 239 MMstb
- Petroleum cost pool: c.US$500m
Shaikan production growth
In 2019, the Company achieved gross average production of 32,883 bopd within original guidance. 2019 saw a step change in activity at Shaikan.
The Company performed tubing workovers on the SH‑1 and SH‑3 wells that led to material production uplifts. The first well of a multi‑well drilling campaign, SH‑12, was completed and subsequently brought online in November. The SH‑9 well, originally designed to test the reservoir crest, was spud in October and was completed as an oil producer. When the Company suspended expansion activities, SH-13 was drilling and would have been followed by SH-I on the same pad.
Other operational targets achieved during the year included the planned maintenance and debottlenecking works at PF‑1 and PF‑2 and the commissioning of the PF‑1 export pipeline in December. This was particularly important as it marked the end of export by trucking from the field, resulting in increased operating efficiencies, lower transportation costs and the elimination of health, safety, security and environment (“HSSE”) risks associated with the transportation of the crude oil by road tankers, as well as the reduction in carbon emissions.
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
Reserves and resources summary as at 31 December 2019
|Gross field oil reserves (MMstb)||Gross field oil resources (MMstb)|
Note: The table above is a GKP estimate. GKP updated values from ERC Equipoise – CPR August 2016 and confirmation letter dated April 2017. CPR volume estimates of 615 MMstb as at 31 December 2016, adjusted by GKP for 12.9, 11.5 and 12.0 MMstb gross production in 2017, 2018 and 2019 respectively.
Vision to develop Shaikan
Phased approach provides flexibility to de-risk long-term potential and time capital investment
- No further expansion investment until outlook improves
- Gas management plan revised following result of SH-9 well
- Revised FDP to be submitted in due course for MNR approval
1) Sanction timing of phases from 75,000 bopd & gas re-injection and beyond remain to be confirmed following FDP approval