REG - Gulf Keystone Petrol - Report on Payments to Governments for 2021

Gulf Keystone PetroleumAnnouncement

29/04/2022 07:00

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RNS Number : 7704J  Gulf Keystone Petroleum Ltd.  29 April 2022

 

29 April 2022

 

 

Gulf Keystone Petroleum Ltd. (LSE: GKP)

("Gulf Keystone", "GKP" or "the Company")

 

Report on Payments to Governments for 2021

 

 

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 2021 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 calculation 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.

 

Infrastructure improvement payments

 

These include payments for infrastructure improvements, whether contractual or
otherwise, such as roads, other than in circumstances where the infrastructure
is expected to be primarily dedicated to operational activities throughout its
useful life.

 

 

                                                                     KRG
 Production entitlements in-kind ((1)) (mboe ((2)))                  5,151
 Production entitlements in-kind ((1))  ($ '000)                     255,763

 Royalties in-kind ((1)) (mboe ((2)))                                1,255
 Royalties in-kind ((1) (2)) ($ '000)                                62,320

 Licence fees and capacity building payments in-kind ((3)) ($ '000)  17,385

 Infrastructure improvement payments ((4))                           342

 Total (mboe ((2)))                                                  6,406
 Total ($ '000)                                                      355,811

 

 

Notes

(1)   All of the crude oil produced by Gulf Keystone was sold by the KRG.
All proceeds of sale were received by or on behalf of the KRG, out of which
the KRG then made payment for cost oil and profit oil in accordance with the
Shaikan PSC to Gulf Keystone, 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. However, for the
purposes of the reporting requirements under the UK Regulations, we are
required to characterise the value of the KRG's production entitlements under
the Shaikan PSC (for which the KRG receives payment directly from the market)
as a payment to the KRG.

(2)   Thousand barrels of oil.

(3)   Capacity building payments are deducted from the monthly crude oil
sales invoice, no direct payment is made to the KRG. The value of licence,
rental and security fees has been accrued and is not expected to be paid, but
rather offset against revenue due from the KRG related to pre-October 2017 oil
sales, which have not yet been recognised in the financial statements.

(4)   Drilling of water well, construction of water supply network and
purchase of generators.

 

 

Enquiries:

 

 Gulf Keystone:                           +44 (0) 20 7514 1400
 Aaron Clark, Head of Investor Relations  aclark@gulfkeystone.com

 Celicourt Communications:                +44 (0) 20 8434 2754
 Mark Antelme                             GKP@Celicourt.uk

 Jimmy Lea

 

 

or visit: www.gulfkeystone.com (http://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 www.gulfkeystone.com
(http://www.gulfkeystone.com/)

 

Disclaimer

 

This announcement contains certain forward-looking statements that are subject
to the risks and uncertainties associated with the oil & gas exploration
and production business.  These statements are made by the Company and its
Directors in good faith based on the information available to them up to the
time of their approval of this announcement but such statements should be
treated with caution due to inherent risks and uncertainties, including both
economic and business factors and/or factors beyond the Company's control or
within the Company's control where, for example, the Company decides on a
change of plan or strategy.  This announcement has been prepared solely to
provide additional information to shareholders to assess the Group's
strategies and the potential for those strategies to succeed.  This
announcement should not be relied on by any other party or for any other
purpose.

 

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