ALBAWABA - Gulf Keystone Petroleum Ltd said Friday it plans to shut-in production at two production facilities in Iraqi Kurdistan amid disputes between Baghdad and the region's government on one side and neighboring Turkey on the other.
Gulf Keystone, a London-listed company, will be the latest oil producer in Iraqi Kurdistan to cut production, Bloomberg reported.
Gulf Keystone Petroleum will become the latest oil producer in Iraqi Kurdistan to cut production, as a legal spat between the region’s government and Baghdad that’s pushed up crude prices drags on https://t.co/7iCa0RZF7y
— Bloomberg (@business) March 31, 2023
On Friday, Gulf Keystone said it expects to shut-in production processed at Production Facility 1. Meanwhile, production flowing into Production Facility 2 will continue into storage tanks at reduced rates for around another two weeks before also being shut-in.
The combined storage capacity at PF-1 and PF-2 is approximately 150,000 barrels, the company noted.
On Monday, Gulf Keystone noted that Turkey closed the Iraq-Turkey pipeline after the International Chamber of Commerce ruled in favor of Baghdad in an arbitration case against Iraq's autonomous Kurdistan region, Market Screener said.
It said: "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 Gulf Keystone operates."
Iraq launched the proceedings against Turkey in 2014, claiming exclusive rights over Kurdistan's oil exports.
We are excited to see strong drilling momentum in the Shaikan Field. SH-16 was brought online this month on schedule & on budget. See our progress on recently spudded SH-17, targeted to bring online in Q1 2023. Next, we plan to spud SH-P with targeted start up in Q2 2023. pic.twitter.com/AiPAFS9urc
— Gulf Keystone (@Gulf_Keystone) December 19, 2022
The Kurdistan Regional Government (KRG) in Erbil defiantly continued to export oil through Turkey at a rate of around 450,000 barrels per day. KRG believes that Baghdad is trying to make gains from the region's resources, while the Iraqi government insists it enjoys complete control over oil production nationwide.
Bloomberg quoted a KRG official as saying his government is slated to meet with the Iraqi federal government again in Baghdad next week. The official expected that the meeting "may lead to the resumption of more than 400,000 barrels a day of Iraqi oil exports that go through Turkey," according to Bloomberg.
Meanwhile, Brent crude nudged up by 5.7 percent this week to above $79 per barrel, partly because traders are anxious of a long stoppage.
The United States has urged the Kurdistan Regional Government and Baghdad to allow exports to resume swiftly.
