June 13, 2014 / 7:12 AM / in 4 years

Gulf Keystone says Kurdistan oil project progressing despite violence

LONDON, June 13 (Reuters) - Oil producer Gulf Keystone Petroleum said plans to increase production from its Shaikan oil field in Iraqi Kurdistan were on track despite escalating violence in the region.

The London-listed oil firm said on Friday three wells at Shaikan PF-1 were producing steadily at a rate of 16,000 gross barrels of oil per day (boed), a level that was set to rise to 20,000 later this year.

The oil field is located north of Kirkuk, the oil city in Iraqi Kurdistan which was taken over by Iraqi Kurdish forces on Thursday.

Brent crude prices have jumped to a nine-month high over fears oil production in the region could be disrupted after the U.S. threatened military action against Sunni Islamists in Iraq.

“Our operations in the Kurdistan Region of Iraq are progressing in line with our previous guidance, whilst we remain alert to the current security situation in Iraq, which has recently escalated outside the Kurdistan Region,” said Gulf Keystone Chief Executive Officer Todd Kozel.

He added that the whole Shaikan complex reached a record daily flow rate of 25,000 boed on June 4.

At 0710 GMT, Gulf Keystone shares were up 2.5 percent at 82 pence.

The company has sold a total of 1.85 million gross barrels of Shaikan crude to the international market.

Iraq and Kurdistan have been trying to reach political agreement over oil sales from the autonomous region.

Two cargoes of crude from Iraqi Kurdistan have already been exported via Turkey. (Reporting by Karolin Schaps; Editing by Mark Potter)

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