By Anchal Rana
(Reuters) -Gulf Keystone Petroleum on Thursday flagged doubts about its ability to continue as a going concern after the oil producer announced that it had cut 55% of its expat jobs to slash costs amid the suspension of Kurdistan crude exports.
The London-listed company, focused on Iraqi Kurdistan, said it was reviewing further job cuts following a hit to production and sales after the closure of the Iraq-Turkey Pipeline in March.
Last week Turkey’s foreign and energy ministers met the head of Iraq’s semi-autonomous Kurdistan regional government (KRG) for talks, including on oil exports, but neither official said if a deal had been reached to resume crude flows through Turkey.
“While no official timeline has been announced, we continue to believe that the suspension of exports will be temporary and that the KRG will resume oil sales payments in due course,” CEO Jon Harris said in a statement.
Turkey had stopped the oil flows in March after losing a long-standing arbitration case brought by Iraq.
Baghdad deems exports from the region via Turkey’s Ceyhan port as illegal.
“Given the current uncertainty over the timing of the pipeline reopening …the Directors have therefore concluded that a material uncertainty exists which may cast significant doubt on the group’s ability to continue as a going concern,” the company said.
The company however said the directors have “reasonable expectation” that group has enough resources to operate for the next 12 months.
Gulf Keystone said it was pursuing further increase in local sales for Shaikan Field crude, although volumes and prices were difficult to predict.
“To protect its balance sheet, the business moved quickly to establish new sales channels into the local market,” said Peel Hunt.
The suspension has also has halted repayments via crude cargoes of $6 billion owed to energy traders including Vitol and Petraco by KRG.
Genel Energy, which also operates in the region, has suspended dividend this month.
(Reporting by Anchal Rana and Yadarisa Shabong in Bengaluru; Editing by Savio D’Souza, Sherry Jacob-Phillips, Philippa Fletcher)
