REG-Gulf Keystone Petroleum Ltd Report on Payments to Governments for 2022

Gulf Keystone PetroleumAnnouncement

28/04/2023 07:15

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   Gulf Keystone Petroleum Ltd (GKP)
   Report on Payments to Governments for 2022

   28-Apr-2023 / 07:00 GMT/BST

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   28 April 2023

                                        

                                        

                    Gulf Keystone Petroleum Ltd. (LSE: GKP)

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

                                        

                   Report on Payments to Governments for 2022

    

   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  2022 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.

    

   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.

    

   Summary of payments

    

                                                                     2022
   Production entitlements in-kind(1) (mboe(2))                     5,280
   Production entitlements in-kind(1) ($‘000)                     392,974
   Royalties in-kind(1) (mboe(2))                                   1,292
   Royalties in-kind(1)(2) ($‘000)                                 96,136
   Licence fees and capacity building payments in-kind(3) ($‘000)  25,009
   Infrastructure improvement payments(4)                             732
   Total (mboe(2))                                                  6,571
   Total ($‘000)                                                  514,851

    

    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 historic  revenue due from  the
       KRG, which have not yet been recognised in the financial statements.
    4. Wheat improvement measures and training of farmers, hydroponic  fodder
       units, drilling of water wells,  construction of water supply  network
       and purchase of generators.

    

    

    

   Enquiries:

   Gulf Keystone:                          +44 (0) 20 7514 1400  
   Aaron Clark, Head of Investor Relations  1 aclark@gulfkeystone.com
                                            
   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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   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.:  240035
   EQS News ID:   1619011


    
   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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   4. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=6965f2bb1ddcf50ad2dd09b21a93cfc7&application_id=1619011&site_id=reuters9&application_name=news


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