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Gulf Keystone Petroleum, which operates in Iraq’s semi-autonomous Kurdistan Region, is reducing its workforce by around 40 percent in view of the unprecedented oil market and macroeconomic conditions, the London-listed independent oil company said on Friday.
Gulf Keystone Petroleum operates the Shaikan Field northwest of Erbil under a Production Sharing Contract with the Kurdistan Regional Government (KRG) and has an 80-percent working interest in the Shaikan license.
Because of the oil price crash, the company is reducing costs by cutting the workforce of around 400 people by some 40 percent, including over 60 percent of expatriates, Gulf Keystone Petroleum said in an operational and corporate update on Friday.
“In response to the unprecedented COVID-19 pandemic and macroeconomic conditions, we took decisive actions to preserve liquidity and safeguard the long-term health of the business,” Gulf Keystone’s Chief Executive Officer Jón Ferrier said.
“Whilst uncertainty around the timing of the end of the crisis persists, the partial oil price recovery gives us some grounds for optimism about the future and our return to delivering the significant untapped value in Shaikan,” the manager added.
In April, when oil prices slumped due to the demand crash, Gulf Keystone Petroleum, the seller of Shaikan crude oil, gave its oil away for free, as the price of its oil pumped from the Shaikan field traded more than $21 under Brent prices. Brent Crude traded at an average of $21.04 for April.
The company confirmed in late May that it had “submitted an invoice to the Kurdistan Regional Government for a nil amount as the monthly average Dated Brent price in April was below the Shaikan crude discount.”
“Following the increase in the Dated Brent price over recent weeks, the invoice to be submitted for crude oil sales during May 2020 will return to a positive amount,” Gulf Keystone Petroleum said last month.
By Charles Kennedy of Oilprice.com
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Charles is a writer for Oilprice.com