Gulf Keystone confirms major Iraq oil discovery

Oil industry firm Gulf Keystone has confirmed it has made another significant oil discovery in the Kurdistan region of Iraq, following its nearby finding at Shaikan.

The well is drilled to a depth of 3,780m and is the first exploration well to be drilled by the company at the site, just west of the company's 80 per cent-owned Shaikan block.

According to Gulf Keystone, the latest discovery, in Sheikh Adi, contains approximately two billion barrels of oil, which chief operating officer John Gerstenlauer hopes will have an impact on the company's retreating share price.

Stock has fallen by 29 per cent so far this year, attributed in part to a lengthy legal case with Excalibur Ventures and also a flight from exploration risk in this week's market sell-off.

However, Mr Gerstenlauer told the Telegraph: "The Sheikh Adi oil in place numbers are all the more significant due to our 80 per cent interest in the block."

Recently, Brazil's Petrobras and Exxon Mobil announced the discovery of 700 million barrels of oil and gas in the Gulf of Mexico.