Gulf Keystone Petroleum Ltd. Report on Payments to Governments for 2020 (9906Y)
May 18 2021 - 5:03AM
UK Regulatory
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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 GBP86,000 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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