IOCs Confirm KRG Oil Export Payments

Gulf Keystone Petroleum, DNO ASA and Genel Energy all confirmed Wednesday that they had received payment from the Kurdistan Regional Government for oil exported from the Kurdistan Region of Iraq.

DNO received $30 million as partial payment towards oil exported from the Tawke field, which will be shared pro-rata with its Tawke license partner Genel Energy plc, and Gulf Keystone received a gross payment of $15 million for crude oil export sales from the Shaikan field. In addition to the latest payments, Genel Energy plc announced yesterday that the Taq Taq field partners had received a gross payment of $30 million from the KRG for oil exported through the Kurdistan Region of Iraq-Turkey pipeline.

Commenting on the latest payment, Jón Ferrier, Gulf Keystone Petroleum CEO, said in a company statement:

"We are pleased to start 2016 with confirmation of payment for December's Shaikan crude oil export sales. This is the fourth consecutive monthly payment, for which we would like to state our thanks to our partner, the MNR."

Back in August 2015, the KRG’s Ministry of Natural Resources announced that the KRG would pay producing international oil companies a portion of the revenue from its direct crude oil sales, on a monthly basis, from September 2015 onwards. In a statement on the MNR’s website, the KRG recognized the “patience of the producing IOCs, which, despite receiving hardly any payments for their crude oil production since May 2014, have maintained operations and have continued to invest to support Kurdistan’s crude oil export”. As export rises in early 2016, the KRG has claimed that it aims to make additional revenue available to IOCs.

Late last year, DNO Executive Chairman Bijan Mossavar-Rahmani revealed that DNO, Genel and Gulf Keystone’s combined capital expenditure (CAPEX) in Kurdistan has fallen considerably as a result of the Kurdistan Regional Government’s lack of payments to producing international oil companies. Addressing delegates at the Kurdistan-Iraq Oil & Gas Conference held in London in December, Mossavar-Rahmani said that the total CAPEX of all three companies in Kurdistan in the first half of 2015 fell to below $200 million from $800 million for the full year in 2014. The DNO Chairman also revealed that around $4 billion is being lost in revenue per year due to production decreases in Kurdistan which have been partly caused by the uncertain payment strategy for IOCs by the KRG.


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