Shares of Gulf Keystone Petroleum Limited (LSE: GKP) declined c16% during Monday’s early deals, following the company’s announcement that the Iraq-Turkey pipeline, the primary export route from the Kurdistan region of northern Iraq, has been shut-in.
According to GKP, Turkey has requested the shut-in after an arbitration ruling by the International Chamber of Commerce in Paris. The ruling determined that Turkey had violated the terms of a 1973 bilateral agreement by allowing the Kurdistan Regional Government (KRG) to export crude via the pipeline without the consent of Baghdad.
GKP stated that production from its Shaikan field will now be constrained, utilising storage facilities in the coming days and will be suspended once storage is full. The company is closely monitoring the situation and is in communication with both the KRG and the Ministry of Natural Resources.
While it is uncertain when exports will resume, public statements by the KRG, Kurdistan’s Ministry of Natural Resources (MNR), and the Iraqi Ministry of Oil (MOO) suggest that the suspension of exports will be temporary, the company said.
In London, GKP shares fell by 28.4p or 16.38% to trade at 145p each.
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