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Independent E&P Gulf Keystone, whose operations are concentrated in Kurdistan, said it has enough cash flow to invest in further crude oil output production in the region. In the release of its first-half 2017 financial results, the company said its cash balance as of September 18 stood at US$133.8 million – resources sufficient to invest in boosting the output from its biggest asset, the Shaikan field.
In fact, Gulf Keystone’s chief executive Jon Ferrier said the company had enough funds to raise its overall output in Iraq from the gross average of 35,550 bpd in the third quarter to 55,000 bpd in the future, if payments from the Kurdistan Regional Government continue to be regular, as they have been in the year to date. In the first half of the year, output averaged 36,664 bpd, which is closer to the upper end of Gulf’s annual target: 32,000-38,000 bpd.
Yet challenges remain, the company noted. Even though Gulf Keystone booked a net profit of US$700,000, versus a loss of US$232.6 million for H1 2016, international crude prices have remained volatile. This volatility, Gulf said, was in large part the result of growing U.S. shale oil production and uncertainty about how much sway OPEC has over the global oil market.
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To this, the company will need take into account the rising tensions in Kurdistan ahead of the September 25 independence referendum. The central Iraqi government is against the vote as it will take a large chunk of OPEC’s second-largest producer’s oil wealth, concentrated in northern Iraq.
Yet despite the tension, CNBC Arabiya earlier today reported that Iraq’s Oil Minister Jabbar al-Luiebi is ready to talk to Erbil regarding oil frictions between the KRG and Baghdad. No details were supplied, but any dialogue regarding the commodity that keeps both Iraq and Kurdistan going would be the smart choice amid the increase in inter-ethnic tension in the autonomous region.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.