London-listed independent operator and producer Gulf Keystone Petroleum said on Monday that it would resume investing in the Shaikan oil field in Iraq's Kurdistan Region, aiming to boost production to 55,000 bpd in the second half of 2019, from just over 30,000 bpd now.
Gulf Keystone, operator of the Shaikan oil field, with its partner, Hungary's MOL, reached an agreement with the natural resources ministry of the Kurdistan Regional Government about the investment project at Shaikan, which will require a total gross investment of between US$200 million and US$230 million, of which Gulf Keystone's net share of the funding will be between US$160 million and US$184 million.
After achieving the 55,000 bpd target in the second half of 2019, Gulf Keystone and its joint venture partner will target a production increase to 75,000 bpd and then to 110,000 bpd.
Gulf Keystone and MOL plan to submit a revised field development plan to Kurdistan's natural resources ministry later this year, setting out the "framework and details of how production increases beyond 55,000 bopd will be achieved."
"We expect to communicate this work plan and associated capex towards the end of the year," Gulf Keystone said in its first-half 2018 earnings release today, which showed record profit after tax.
At Shaikan, the gross average production in the first half of 2018 was 31,861 bopd and 31,399 bopd for July and August, at the top end of the full-year guidance of 27,000-32,000 bopd, which was kept unchanged, Gulf Keystone said.
"The region has remained stable and the Company has also benefited from an improved oil price environment, with the average Brent crude oil price for the first half of the year being over $70 a barrel (H1 2017: $52/bbl). The resurgence in oil prices also played a role in the global investment community becoming increasingly positive on the prospects for the oil and gas sector," the company's top managers said in the statement.
By Tsvetana Paraskova for Oilprice.com
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