ERBIL, Kurdistan Region - British petroleum company Gulf Keystone Petroleum (GKP) on Tuesday announced the resumption of operations at the Sheikhan oil field in Duhok Governorate, stating that the restart of oil production and export from the field comes after a challenging period of regional security complexities.
According to the first-half 2026 report, Gulf Keystone resumed operations on August 16, 2026, following a second precautionary shutdown that lasted from July 19 to August 15, 2026.
Trilateral agreement and oil production and export
Total production volume is rapidly increasing and is now approaching 40,000 barrels of oil per day. Average total production in the first half of 2026 dropped to 14,600 barrels per day, compared to 44,100 barrels in the first half of 2025 due to the precautionary shutdown between February 28 and June 23, 2026.
Oil export activities from the Sheikhan field have successfully resumed under the expanded agreements of the parties, and better financials are expected for the company.
Regarding the trilateral agreement, the report stated: "Temporary oil export arrangements between International Oil Companies (IOCs), the Federal Government of Iraq (FGI), and the Kurdistan Regional Government (KRG) have been extended for six months until the end of January 2027."
GKP provides secure, prompt payments following oil loadings, alongside better financial returns compared to domestic sales and managed to achieve an average export selling price of $83.5 per barrel in the first half of 2026 - an $8.8 discount per barrel compared to Brent.
Conflict Losses and Cost Controls
Regional security issues forced the company to temporarily halt production, but strict cost-control measures have kept the company's financial standing protected.
Cash expenditures dropped to just $2.0 million in H1 2026 (compared to $24.6 million in H1 2025) while operating costs decreased by 25 percent to $20.2 million, compared to $26.9 million last year.
Future Strategy
Capital expenditure investments have focused on safety upgrades and the PF-2 water treatment project, which will begin in the first quarter of 2027.
John Harris, Chief Executive Officer of Gulf Keystone, stated: "Our priority has been the safety of our workforce, and we have been able to maintain a debt-free financial balance and distribute $12.5 million in dividends to shareholders."
