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Gulf Keystone Petrol (GKP)

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Tuesday 18 May, 2021

Gulf Keystone Petrol

Report on Payments to Governments for 2020

RNS Number : 9906Y
Gulf Keystone Petroleum Ltd.
18 May 2021
 

 

.

 

18 May 2021

 

Gulf Keystone Petroleum Ltd. (LSE: GKP)

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

 

Report on Payments to Governments for 2020

 

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 2020 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.

 

 

Summary of payments

 

KRG

Production entitlements in-kind (1) (mboe (2))

4,354

Production entitlements in-kind (1)  ($ '000)

90,906

 

 

Royalties in-kind (1) (mboe (2))

1,061

Royalties in-kind (1) (2) ($ '000)

22,151

 

 

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

7,347

 

 

Infrastructure improvement payments (4)

202

 

 

Total (mboe (2))

5,415

Total ($ '000)

120,605

 

 

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 repairs to village access roads.

 

 

Enquiries:

 

Gulf Keystone:

+ 44 (0) 20 7514 1400

Aaron Clark, Head of Investor Relations

 

 

 

Investor relations:

+ 44 (0) 20 8434 2754

Mark Antelme

Jimmy Lea

 

 

or visit:  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

 

 

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