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Gulf Keystone Petroleum (LSE:GKP) has reached yet another milestone on the road to success. The company announced that it expects to admit its common shares to the Official List on the LSE Main Market, leaving the era of its AIM listing behind.
GKP’s efforts have been inspired by the vision of tapping into and monetizing the abundant petroleum resources of the Shaikan oil field in Kurdistan. Not only did GKP have to deal with the typical bureaucratic and physical nightmares that always seem to accompany the effort to get oil out of the ground, it was also up against a logistic problem of major proportions. Everyone knows that the value of oil in the ground is only potential. In other words, it’s not worth anything – yet. The greatest concern with the Shaikan field has always been, not how to get the oil out of the ground, but how to get it to market. You see, just because the oil is above ground does not give it any more value. It gives it more potential for value, but it has no value until it is sold. GKP’s problem has been how to get the oil out of the country to Turkey from whence it can be used. Until recently, tanker trucks was the only way to do that.
Recently, however, the Kurdistan government completed the long-awaited pipeline from Shaikan to the Turkish border. That pipeline is capable of delivering 10 to 12 million gallons of oil per month a number that is simply not attainable by truckloads, not to mention that it is much less expensive.
On 10th January, GKP CEO Todd Kozel announced that his company had commenced using the new pipeline t0 get the oil to market. Click here to watch the video presentation of his announcement. This represents the beginning of the fulfillment of Kozel’s dream as both the oil and the cash begin to flow in the right direction. Kozel said that GKP has ramped up its production rate to between 9 and 10,000 barrels per month as it heads for the next milestone of 100,000 barrels and the next after that of 200,000.
If you follow message boards at all, you will notice that there are already naysayers who decry the current news as being two years late. This is not about an airline flight arrive late at the gate. I would suggest to them that they develop an understanding of the realities involved in exploration, drilling, production and monetization. Reality does not always nor often conform to our plans. But nothing is quite as satisfying as a plan completed, despite obstacles and delays.
