Gulf Keystone Petroleum Ltd and Genel Energy PLC both noted that Turkey closed the Iraq-Turkey pipeline after the International Chamber of Commerce ruled in favour of Baghdad in an arbitration case against Iraq’s autonomous Kurdistan region.

Gulf Keystone shares fell 17% to 143.45 pence each in London on Monday morning, while Genel Energy shares were down 7.2% to 109.00p each.

Gulf Keystone said its ‘facilities have storage capacity that allow continued production at a curtailed rate over the coming days after which the company will suspend production’, adding that it is not clear when export operations will resume.

Genel Energy said that it continues to produce oil into storage facilities.

Baghdad said the arbitration tribunal of the Paris-based ICC had accepted Baghdad’s claims in a dispute with Ankara over who had responsibility for exporting the oil from Iraq’s autonomous Kurdistan region, where both Gulf Keystone and Genel operate.

Iraq in 2014 launched the proceedings against neighbouring Turkey, claiming exclusive rights over Kurdistan’s oil exports.

But in defiance of Baghdad, the regional government in Arbil continued to export oil through Turkey at a rate of around 450,000 barrels a day.

Iraq’s oil ministry said that the Paris arbitration tribunal had ruled that Baghdad’s State Oil Marketing Organization ‘is the only entity authorised to manage exports’.

The Kurdistan government sees Baghdad as trying to profit from the region’s resources, while the Iraqi government argues it should enjoy sovereign control over all of the country’s oil production.

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