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.
PF-1
- SH-1
- SH-3
- SH-4
- SH-7
- SH-8
- SH-9
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.
| First oil | |
|---|---|
| SH-1 | September 2010 |
| SH-3 | November 2011 |
| SH-4 | March 2014 |
| SH-7 | December 2014 |
| SH-8 | March 2015 |
| SH-9 | December 2020 |
PF-2
- SH-2
- SH-5
- SH-10 & SH-11
- SH-12
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.
| First oil | |
|---|---|
| SH-2 | June 2014 |
| SH-5 | June 2014 |
| SH-10 | December 2014 |
| SH-11 | April 2015 |
| SH-12 | November 2019 |
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 80 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. As conditions continue to improve, the Company plans to recommence the expansion project.
Field overview
- 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 80 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
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 at January 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. SH-12 returned to production on 15 November 2020 with the well flowing at a stable rate of over 5,000 bopd. The production flows to the PF-2 production facility, where there is spare production capacity. The workover design allowed the original Electronic Submersible Pump (“ESP”) completion to remain in place during the operation and the ESP is now back-in service. The operation came in ahead of schedule and on budget. The SH-9 well, on which activity was suspended in March 2020 due to COVID-19, was successfully tied-in to PF-1 and is on production.
In 2020, average gross production at Shaikan was 36,625 bopd, exceeding the top end of the guidance range and the highest annual average production rate to date from the field. Planned debottlenecking works have increased PF-1 production capacity to more than 30,000 bopd and the Company expects to deliver average gross production in 2021 of 40,000 to 44,000 bopd. GKP continues its strong focus on safety which resulted in no Lost Time Incidents during 2020.
Average daily gross production in January 2021 was 44,405 bopd, the highest monthly average to date from the field. GKP is well positioned to restart its drilling programme to achieve 55,000 bopd when circumstances permit.
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 |
|---|---|---|---|---|
| Formation (MMstb) | Reserves | Resources | ||
| Jurassic | 240 | 505 | 80 | 585 |
| Triassic | - | - | 157 | 157 |
| Cretaceous | - | - | 56 | 56 |
| Total | 240 | 505 | 293 | 798 |
| 31 December 2019 | 1P | 2P | 2C1 | 2P+2C2 |
|---|---|---|---|---|
| Formation (MMstb) | Reserves | Resources | ||
| Jurassic | 175 | 531 | 80 | 611 |
| Triassic | 18 | 44 | 106 | 150 |
| Cretaceous | 1 | 3 | 53 | 56 |
| Total | 194 | 578 | 239 | 817 |
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:
| 1P | 2P | 2C1 | 2P+2C2 | |
|---|---|---|---|---|
| Gross (MMstb) | Reserves | Resources | ||
| 31 December 2019 | 194 | 578 | 239 | 817 |
| Production | (13) | (13) | - | (13) |
| Reclassifications | (19) | (47) | +47 | - |
| Revisions | +78 | (13) | +7 | (6) |
| 31 December 2020 | 240 | 505 | 293 | 798 |
GKP’s 80% net WI3 share of reserves and resources at 31 December 2020 were:
| 1P | 2P | 2C1 | 2P+2C2 | |
|---|---|---|---|---|
| Formation (80% WI (MMstb) | Reserves | Resources | ||
| Jurassic | 192 | 404 | 64 | 468 |
| Triassic | - | - | 125 | 125 |
| Cretaceous | - | - | 45 | 45 |
| 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 remains
Phased approach provides flexibility to time capital investment
- Expansion to 55,000 bopd, once conditions allow
- Gas management plan revised following result of SH-9 well
- Revised FDP to be submitted in due course for MNR approval
1) As at 13 January 2021
2) Estimated duration of current gas management plan (gas sweetening and sulphur recovery) of 60-66 months. Initial capital cost estimates for the revised plan are estimated at US$275-375 million (+/-40% accuracy)