Gulf Keystone in court battle over Kurdistan fields

By Sarah Young

LONDON, Oct 9 (Reuters) - Gulf Keystone , one of thebiggest companies listed on London's junior AIM stock market, isdue to start the defence of its ownership of a huge oil field inIraqi Kurdistan in a London court this week.

The company has long been touted as a potential acquisitiontarget for an oil major looking for a foothold in Kurdistan, butthe looming legal battle has been cited as a potential obstacleto any takeover deal.

Kurdistan is emerging as an attractive oil province for bigwestern oil companies. Exxon Mobil , Total andGazprom have all taken acreage there over the lastyear, lured by the lucrative terms on offer in Iraq'ssemi-autonomous northern region.

Gulf Keystone will contest claims made by Excalibur VenturesLLC at the English Commercial Court. The claimant, whichcommenced legal action in 2010, asserts it is entitled to aninterest of up to 30 percent in all of Gulf Keystone's blocks inKurdistan.

Gulf Keystone's prize asset in Kurdistan is the Shaikanfield, which could hold up to 15 billion barrels of oil - avolume which would make it one of the biggest discoveries madeanywhere in recent years.

Under legal orders, Excalibur has paid 6 million pounds($9.6 million) to the court as security for Gulf Keystone'slegal costs, and 3.5 million as security for the costs of TexasKeystone, a U.S.-based company against which it has also madethe claims.

Texas Keystone, a company founded by Gulf Keystone ChiefExecutive Todd Kozel and of which he is still a director, holdsa small interest in the Shaikan field in trust for GulfKeystone.

Kozel, whose expensive divorce attracted media coverage ninemonths ago, is one of Britain's highest-paid executives, havingearned around $20 million in 2011.

The court case, which is expected to take between 10 and 12weeks, was scheduled to start on Wednesday but was delayed bythe judge.

Shares in Gulf Keystone closed at 205.75 pence on Tuesday,down over 50 percent from an all-time high reached in February,and valuing the company at about 1.75 billion pounds.

($1 = 0.6240 British pounds)(Editing by David Holmes)

((sarah.young@thomsonreuters.com)(+44 20 7542 1109)(ReutersMessaging: sarah.young.thomsonreuters@reuters.net))