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Gulf Keystone in court battle over Kurdistan fields

By Sarah Young

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

The company has long been touted as a potential acquisition target for an oil major looking for a foothold in Kurdistan, but the looming legal battle has been cited as a potential obstacle to any takeover deal.

Kurdistan is emerging as an attractive oil province for big western oil companies. Exxon Mobil , Total and Gazprom have all taken acreage there over the last year, lured by the lucrative terms on offer in Iraq's semi-autonomous northern region.

Gulf Keystone will contest claims made by Excalibur Ventures LLC at the English Commercial Court. The claimant, which commenced legal action in 2010, asserts it is entitled to an interest of up to 30 percent in all of Gulf Keystone's blocks in Kurdistan.

Gulf Keystone's prize asset in Kurdistan is the Shaikan field, which could hold up to 15 billion barrels of oil - a volume which would make it one of the biggest discoveries made anywhere in recent years.

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

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

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

The court case, which is expected to take between 10 and 12 weeks, was scheduled to start on Wednesday but was delayed by the 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)(Reuters Messaging: sarah.young.thomsonreuters@reuters.net))

Keywords: GULFKEYSTONE KURDISTAN/COURT