KRG Accelerates Payments But Suffers Further Production Setbacks

Though the KRG’s struggling economy has got some relief from the last two months’ rise in oil prices, the planned output gains that would put the region’s finances on a sounder long-term footing continue to recede into the distance.

A rise of 17% in oil prices since Opec’s November 2016 agreement to cut production (see p10 ), has provided some relief to Iraqi Kurdistan’s struggling economy.

The revenue boost has enabled the KRG to make a second set of payments for production at three key oil fields in a matter of weeks on 7-9 February. But though payments for November production from the DNO-operated Tawke, Genel-operated Taq Taq and Gulf Keystone-operated Shaikan fields were received this week, those for December are already nearly a month overdue.

If the KRG was hoping that its economic woes would be partially ameliorated by output gains from these fields, along with ramp ups from smaller fields, this year, it may have to think again. None of DNO, Gulf Keystone or Genel look set to unleash a fresh wave of investment in the KRG. Indeed, of the three, DNO looks the only one capable of securing noticeable output gains this year. (CONTINUED - 1168 WORDS)

DATA INSIDE THIS ARTICLE

chart Taq Taq Output Plummets Towards Shaikan Levels (‘000 B/D)
chart Dno Plots Capex Increase In 2017 ($Mn)