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KRG Close to Resuming Payments to Oil Companies

KRG Close to Resuming Payments to Oil CompaniesKRG Close to Resuming Payments to Oil Companies

The Kurdistan Regional Government in Iraq is close to resuming regular monthly payments to international oil companies as the rally in crude prices replenishes the region’s depleted treasury, according to people familiar with the matter.

It is almost seven weeks since Genel Energy Plc, Gulf Keystone Petroleum Ltd and DNO ASA received their last payment from the Kurdistan Regional Government, which was for oil sold in September, Bloomberg reported.

The companies and the regional authorities have now agreed on a new monthly payment schedule, said two people familiar with the matter, who asked not to be identified because the information is not public. At least one company has been told to expect a payment on Monday, two other people said.

“We have an ongoing dialogue with the KRG, and they have recently reconfirmed their commitment to paying contractors,” Genel said in an e-mailed statement, without commenting on when it expected to receive the next payment. 

“We are confident that we will receive payments for oil exported from the Kurdistan Region of Iraq regularly, on a monthly basis, throughout 2017.”

The KRG has struggled to keep up regular payments to the international contractors as it contended with low crude prices, a dispute over revenue sharing with the federal government in Baghdad, hosting large numbers of internal refugees and battling for territory with the so-called Islamic State militants. 

Oil has risen about 20% since OPEC’s historic agreement with several other major producers to curb supply, easing the financial strain on the region.

The region pumped 597,587 barrels a day in November from its own fields, according to the latest available estimates from the Kurdish Ministry of Natural Resources. That is an increase of 38% from a year earlier, but little more than half the 1 million barrel-a-day target set by the KRG a year ago. 

The ministry has yet to publish production and export data for December.

 

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