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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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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
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2. mailto:GKP@fticonsulting.com
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