Bloomberg News

Gulf Keystone, Petroceltic Surge on Kurdistan-Iraq Agreement

November 25, 2011

(Updates with closing share price in second paragraph.)

Nov. 14 (Bloomberg) -- Gulf Keystone Petroleum Ltd. and Petroceltic International Plc led share gains among explorers operating in Kurdistan after the regional government was said to agree on drilling contracts with central Iraqi authorities.

Petroceltic rose 8.8 percent to 8.16 pence in London. Gulf Keystone climbed 1.6 percent to 180 pence. DNO International ASA advanced 2 percent to 8.245 kroner in Oslo.

Iraqi Prime Minister Nouri Kamil al-Maliki agreed to recognize drilling contracts signed by the semi-autonomous Kurdistan Regional Government, or KRG, after weeks of talks with Kurdish leader Barham Salih, two people with knowledge of the negotiations said last week. The accord followed an Exxon Mobil Corp. agreement to explore six blocks in the northern region.

“Until now Baghdad had refused to recognise the contracts that the KRG had signed with oil companies,” Phil Corbett, an analyst at Royal Bank of Scotland Group Plc, wrote in an e- mailed report. The “devil will be in the detail, particularly with respect to the treatment of cost recovery and profit share, but there doesn’t look like anything up front to suggest that the KRG has had to give significant ground.”

--Editor: Stephen Cunningham

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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