Gulf Keystone production to fall in 2018 as it invests for future growth
Source - SMW
Kurdistan based oil producer Gulf Keystone Petroleum expects production to be lower in 2018 after hitting the mid-point of its guidance in 2017 at 35,298 barrels of oil per day.
The fall to between 27,000 and 32,000 bopd reflects a need to install downhole pumps in some wells but the company plans to invest this year to bring production up to 55,000 bopd.
Since 15 November 2017, the Kurdistan Regional Government's Ministry of Natural Resources (MNR) has resumed exporting the Shaikan crude via the export pipeline to Turkey. The company sees the latest export development as confirmation of the suitability of the Shaikan crude within the Kurdish blend.
The company was encouraged by the signature of the crude oil sales agreement announced on 16 January 2018. The company is also in dialogue with the MNR on the terms of a potential 2nd PSC Amendment.
Subject to resolution of the commercial matters and the KRG continuing regular payment of monthly invoices, the Company currently intends on investing this year in wells and facilities to expand production capacity to 55,000 bopd.
Part of these investments would include the hook-up of a short (400m) spur pipeline from Production Facility 2 to the Atrush export line, which links to the main export oil line to Turkey. This will reduce trucking requirements, HSE risk and improve netbacks.
Elsewhere chairman Keith Lough and chief strategy officer Nadim Zahawi are set to step down. The cash position of the company stands at $157m