Weekly MENA Newsletter will be delivered to your email in PDF format every Friday (52 Issues per Year).
Iraq’s Kurdistan Regional Government (KRG) is to pay IOCs according to their Production Sharing Contracts (PSC) in a bid to boost investor confidence and cut expenses. The region’s economy is suffering as oil revenues tank and this is piling political pressure on the government. The 1 February announcement by the Ministry of Natural Resources (MNR) brings an end to the monthly payments of $75mn that began in September. The KRG will be hoping that the move will reduce expenses and galvanize the three main exporting companies – Genel, DNO and Gulf Keystone Petroleum (GKP) – into boosting production.
With IOCs previously receiving a flat fee, there was no incentive to increase production, especially as they are all owed hefty receivables from the KRG. This has resulted in production declines, with the Genel-operated Taq Taq field currently some 60,000 b/d down from its peak last year, at 83,000 b/d (see table). (CONTINUED - 1997 WORDS)
DATA INSIDE THIS ARTICLE
|chart||KRG Crude Export* Revenues Slump Despite Volumes At Near-Record Levels|
|table||Table1: The KRG’S Key Foreign Operators: Sep-Dec 2015 Monthly Payments|
|table||KRG: Key Crude Stats ('000 B/D)|