Gulf Keystone moves to end spat with shareholders

LONDON, July 21 Sun Jul 21, 2013 12:25pm BST

Quotes

   

LONDON, July 21 (Reuters) - Oil exploration company Gulf Keystone Petroleum has withdrawn its opposition to four directors proposed by shareholder M&G Recovery Fund, ending a row with its biggest investors over corporate governance.

Gulf Keystone said in a statement late on Saturday that it had reached a "constructive agreement" with shareholders regarding the shape of its board.

Meanwhile, M&G Recovery Fund, holding 5.1 percent of the company, and Capital Research Global Investors, with 5.6 percent, will back the appointment of former Glencore chairman Simon Murray as non-executive chairman, the firm said.

"I am pleased that unity of purpose has been restored," Murray said. "... We can now return our focus to the important objective of creating value for all shareholders and continue to deliver operational success."

Gulf Keystone, which is focused on oil fields in the Kurdistan region of Iraq, this month appointed Murray to head the board, splitting the chairman and chief executive roles to improve governance.

M&G, the fund management division of insurer Prudential , had proposed candidates Philip Dimmock, John Bell, Thomas Shull and Jeremy Asher after criticising governance and "excessive" executive pay at the company.

Gulf Keystone said its board would recommend that shareholders vote against M&G's choices, arguing that they lacked a "consistent track record of successful operation and commercial experience".

The firm has been beset by difficulties, including Kurdistan's long-running dispute with the central government of Iraq over payments for oil, and a legal challenge to the ownership of the company's oil fields.