Gulf Keystone faces claim from Excalibur on Kurdistan assets

Excalibur Ventures LLC has gone to court in New York and London with claims of entitlement to a 30% stake in Gulf Keystone Petroleum's oil assets in Iraq's northern Kurdistan region.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Dec. 30 -- Excalibur Ventures LLC has gone to court in New York and London with claims of entitlement to a 30% stake in Gulf Keystone Petroleum's oil assets in Iraq's northern Kurdistan region.

Gulf Keystone said Excalibur began proceedings in New York Dec. 23 to assert claims that it introduced Gulf Keystone’s management to opportunities in the Kurdistan region and had a contract to develop the area together 3 years ago.

Excalibur also filed the claims in London on Dec. 21 where it sought a "worldwide freezing” of Gulf Keystone's assets. The London court refused Excalibur’s request on the grounds that it did not consider there was any risk that the firm’s assets would be dissipated.

Excalibur, described on its web site as offering advisory services related to Iraq from project finance to translators and security, is run by Rex Wempen, cofounder of the US-Iraq chamber of commerce and former security consultant.

Observers in London said that Gulf Keystone is expected to argue that it never had a contract with Excalibur, but will acknowledge its Chief Executive Todd Kozel had worked with Wempen through a firm called Texas Keystone.

Texas Keystone has a commercial relationship with Gulf Keystone, providing professional management and administrative services. Texas Keystone also initially led the pursuit of opportunities for oil exploration in Kurdistan, from which Gulf Keystone later profited.

In particular, Texas Keystone is said to have negotiated Gulf Keystone’s contract with the Kurdistan Regional Government (KRG) for the Shaikan oil field, which is estimated to hold as much as 4.2 billion bbl of oil.

Kozel said his firm will contest Excalibur's actions in both courts, saying, “We believe we have very good grounds to vigorously challenge these claims.”

In Kurdistan, Gulf Keystone holds interests in four blocks:

• Shaikan, 85 km northwest of Erbil, covering 283 sq km. Interests under the production-sharing contract are Gulf Keystone 75% (operator), MOL 20%, and Texas Keystone 5%.

• Akri-Bijeel, adjacent to Shaikan block. Interests in PSC are MOL 80% (operator) and Gulf Keystone 20%.

• Sheikh Adi, northeast of Dihok and to the west and on trend with the Shaikan structure. Gulf Keystone, operator, holds an 80% interest in the PSC. KRG holds 20%.

• Ber Bahr, north of Dihok on a trend with Shaikan and Sheikh Adi blocks. Ber Bahr PSC is operated by Genel Energy International Ltd., 40%. Gulf Keystone holds 40% and KRG holds 20%.

In August, Gulf Keystone reported a stable test rate of 1,250 b/d of 19.7° gravity oil at the Shaikan-1 discovery in Iraq Kurdistan, up from 128 b/d on a test in 2009 (OGJ, Aug. 11, 2010).

Contact Eric Watkins at hippalus@yahoo.com.

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