Gulf Keystone to Sell Algerian Permit to Focus on Kurdistan Operations
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Interest in Hassi Ba Hamou for sale
Bermuda-based oil company Gulf Keystone Petroleum Ltd. says it is looking to sell its interest in the Hassi Ba Hamou permit (HBH).
The company says any sale of interest is subject to approvals from the Algerian government, Algerian oil company Sonatrach and BG North Sea Holdings Limited. The company’s decision appears to be the result of its commitment to Kurdistan operations, as the Algerian project is not projected to generate revenue until 2014. Gulf Keystone reports that following appraisal and exploration successes on the HBH Gas Project, the partners in June 2008 elected to go into phase 2 of the exploration contract with an additional three well and 2D seismic commitment. Planning for the development and commercialization of the Project has also begun but revenues are not expected until 2014. Given the significant near-term upside potential of Gulf Keystone's interests in Kurdistan, the company says it considered view that shareholders' interests would be best served by focusing its resources entirely on its Kurdistan operations. Consequently, Gulf Keystone suspended further investment in the HBH permit and, opting not to pay certain due cash calls in respect of the Permit. BG, which acts as operator of the permit, has certain rights under the terms of the Joint Operating Agreement which could, subject to certain Permit conditions, lead to Gulf Keystone's withdrawal from the agreement and the Permit.
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