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Iraq’s Kurdistan Regional Government (KRG) this week followed through on its pledge to pay the international oil firms that produce 60% of its output a share of their dues.
But the $75mn in payments is a mere 4.5% of the $1.66bn that the three key firms say they are owed. Further regular payments will be needed to persuade them to make the investment needed for the KRG to build on the output gains that have seen the region’s production rise from 200,000 b/d in 2013 and 296,000 b/d in 2014 to average 540,000 b/d in recent months.
A massive downgrading of Hungarian firm Mol’s plans for the region – largely due to geology, but also a lack of payments – came on 8 September, the day after the payments announcement. Mol had been one of the KRG’s key upstream investors.
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