REG-Gulf Keystone Petroleum Ltd Report on Payments to Governments for 2023

Gulf Keystone PetroleumAnnouncement

25/04/2024 07:15

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   Gulf Keystone Petroleum Ltd (GKP)
   Report on Payments to Governments for 2023

   25-Apr-2024 / 07:00 GMT/BST

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   25 April 2024

                                        

                                        

                    Gulf Keystone Petroleum Ltd. (LSE: GKP)

                   (“Gulf Keystone”, “GKP” or “the Company”)

                                        

                   Report on Payments to Governments for 2023

    

    

   Introduction

   This report sets out details of  the payments made to governments by  Gulf
   Keystone Petroleum Ltd and  its subsidiary undertakings (“Gulf  Keystone”)
   for the  year  ended 31 December 2023  as  required under  Disclosure  and
   Transparency Rule  4.3A issued  by the  UK’s Financial  Conduct  Authority
   (“DTR 4.3A”) and in accordance with The Reports on Payments to Governments
   Regulations 2014  (as  amended in  2015)  (“the UK Regulations”)  and  our
   interpretation of the Industry  Guidance on the  UK Regulations issued  by
   the International Association of  Oil & Gas  Producers. DTR 4.3A  requires
   companies listed  on a  stock exchange  in  the UK  and operating  in  the
   extractive industry to  publicly disclose payments  to governments in  the
   countries  where  they  undertake  exploration,  prospection,   discovery,
   development and extraction of minerals, oil, natural gas deposits or other
   materials.

    

   Basis for preparation

   Total payments below £86,000 made to  a government are excluded from  this
   report, as permitted under the UK Regulations.

    

   All of the  payments made in  relation to the  Shaikan Production  Sharing
   Contract (“Shaikan PSC”) in the Kurdistan Region of Iraq have been made to
   the Ministry  of  Natural  Resources (“MNR”)  of  the  Kurdistan  Regional
   Government (“KRG”).

    

   Production entitlements

   Production entitlements  are the  host  government’s share  of  production
   during the  reporting  period from  the  Shaikan Field  operated  by  Gulf
   Keystone. The figures reported have been produced on an entitlement basis,
   rather than on a liftings basis. Production entitlements are paid  in‑kind
   and the monetary  value disclosed is  derived from management’s  estimates
   based on the monthly oil sales invoices.

    

   Royalties

   Royalties represent royalties paid in-kind to governments during the  year
   for the extraction of oil. The terms of the royalties are described within
   the Shaikan  PSC. Royalties  have been  calculated on  the same  basis  as
   production entitlements.

    

   Licence fees and capacity building payments

   These include licence  fees, rental  fees, entry  fees, capacity  building
   payments,  security  fees  and   other  considerations  for  licences   or
   concessions.

    

   Summary of payments

    

                                                                     2023
   Production entitlements in-kind(1) (mboe(2))                     2,658
   Production entitlements in-kind(1) ($’000)                     109,345
   Royalties in-kind(1) (mboe(2))                                     637
   Royalties in-kind(1, 2) ($’000)                                 26,221
   Licence fees and capacity building payments in-kind(3) ($’000)   7,522
   Total (mboe(2))                                                  3,295
   Total ($’000)                                                  143,087

    

    1. Crude oil  produced by  Gulf Keystone  into the  Iraq Turkey  Pipeline
       (“ITP”) was  sold by  the  KRG up  until  the suspension  of  pipeline
       exports on 25 March 2023. During this period all proceeds of sale were
       received by or on behalf of the KRG, out of which the KRG subsequently
       made payment  for  cost  oil  and  profit  oil  to  Gulf  Keystone  in
       accordance with the  Shaikan Production Sharing  Contract (“PSC”),  in
       exchange  for  the  crude  oil  delivered  to  the  KRG.  Under  these
       arrangements, payments were made  by or on behalf  of the KRG to  Gulf
       Keystone, rather than by Gulf Keystone to the KRG. For the purposes of
       the reporting requirements under the UK Regulations, Gulf Keystone  is
       required  to   characterise  the   value  of   the  KRG’s   production
       entitlements under  the  PSC  (for  which  the  KRG  receives  payment
       directly from the market) as a payment to the KRG. From 19 July  2023,
       crude oil produced by Gulf Keystone was sold to local buyers. The  KRG
       received its share of profit oil  in accordance with the PSC and  sold
       the volumes directly to local buyers with the estimated value of  such
       sales being included as a payment to the KRG.  
    2. Thousand barrels of oil.
    3. For crude oil sales into the ITP from 1 January 2023 to 25 March 2023,
       capacity building payments  were deducted from  the monthly crude  oil
       sales invoice amount payable  to Gulf Keystone  and no direct  payment
       was made to the KRG. For local sales from 19 July 2023 to 31  December
       2023, the KRG received capacity  building volumes in kind, which  they
       then sold to local buyers. The  value of licence, rental and  security
       fees has  been accrued  and is  not expected  to be  paid, but  rather
       offset against historic revenue due from  the KRG, which have not  yet
       been recognised in the financial statements.

    

    

   Enquiries:

   Gulf Keystone:                          +44 (0) 20 7514 1400  
   Aaron Clark, Head of Investor Relations
                                            1 aclark@gulfkeystone.com
   & Corporate Communications
                                            
   FTI Consulting                          +44 (0) 20 3727 1000
   Ben Brewerton
                                            2 GKP@fticonsulting.com
   Nick Hennis

    

   or visit:  3 www.gulfkeystone.com

    

   Notes to Editors:

    

   Gulf Keystone Petroleum Ltd. (LSE: GKP) is a leading independent  operator
   and producer in the Kurdistan Region of Iraq. Further information on  Gulf
   Keystone is available on its website  4 www.gulfkeystone.com

    

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   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:          BMG4209G2077
   Category Code: MSCM
   TIDM:          GKP
   LEI Code:      213800QTAQOSSTNTPO15
   Sequence No.:  317752
   EQS News ID:   1888785


    
   End of Announcement EQS News Service

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References

   Visible links
   1. mailto:aclark@gulfkeystone.com
   2. mailto:GKP@fticonsulting.com
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