Gulf Keystone Petroleum's Akri-Bijeel in Iraq given green light

The Kurdish regional government has approved the field development plan (FDP) for the Akri-Bijeel block, which is part-owned by Gulf Keystone Petroleum.

Hungary-based MOL, the operator of the block in which GKP holds a 20% working interest, announced to the market that the FDP "has been officially approved by the Minister for Natural Resources" and so it will begin the first phase of development immediately.

GKP's chief executive John Gerstenlauer said: "The approval of the field development plan for the Akri-Bijeel Block is a culmination of years of exploration and appraisal, which will now lead to a development phase and production in due course.

"It is an important milestone for all stakeholders in the Akri-Bijeel project."

Having previsouly announced two commercial discoveries in the block, MOL said it planned to complete the development in two phases.

The objective of the first phase is to allow MOL to better determine key factors such as the reserves base, recovery factor, optimum surface facility design and overall field development cost.

Phase I will start immediately with four drilling rigs and one work-over rig to help reduce the overall timeline with front-end-loading wherever possible for Phase II.

Broker Cantor noted that GKP has long intimated that its interest in Akri-Bijeel is up for sale as it continues to look at opportunities in portfolio rationalisation in order to focus development operations on its flagship Shaikan field.

"However in our view, a disappointing CPR especially in relation to this block will likely act as a barrier to any sale, with a 2C figure of 43m barrels of oil."

Analysts reiterated that they believed the underlying fundamentals of the company "remain robust in our view", and following its recapitalisation earlier this year, GKP "is well funded ahead of an active appraisal campaign across its portfolio".