Gulf Keystone Petroleum Limited (LSE:GKP) shares fell around 16% in Monday’s early deals as it reported to investors that the main export route out of the Kurdistan region of northern Iraq, the Iraq-Turkey pipeline, has been shut-in.
The shut-in was at Turkey’s request and follows an arbitration ruling by the International Chamber of Commerce in Paris, which determined that Turkey was violating the terms of a 1973 bilateral agreement by allowing the Kurdistan Regional Government (KRG) to export crude through the pipeline without Baghdad’s consent, GKP said in a statement.
Turkey has shut-in the pipeline until the situation is resolved, GKP noted in a statement, which also detailed that production from the company’s Shaikan field will now be at a constrained rate, utilising storage facilities in the coming days – and will be suspended once storage is full.
“Although it is not yet clear when export operations will resume, public statements made by the KRG, Kurdistan’s Ministry of Natural Resources (MNR) and the Iraqi Ministry of Oil (MOO) lead us to believe that the suspension of exports will be temporary,” GKP told investors.
It added: “GKP is closely monitoring the situation and engaging with both the KRG and the MNR. The company will provide further updates to the market, as appropriate.”
In London, GKP shares fell 28.4p or 16.38% to trade at 145p each.