Just a few short months ago Iraqi Kurdistan was looking ahead to a strong 2020 for its vital oil industry. Now, the Kurdistan Regional Government (KRG) is once again faced with a credit crunch where it may have to choose between paying IOCs, oil traders or other essential payments. Without securing external funding, the KRG is unable to meet its financial obligations, and if Baghdad does cut salary payments, Erbil’s finances will be left in tatters.
With firms slashing capex, previous estimates that the region’s production could near 550,000 b/d by the end of the year (MEES, 13 December 2019) are dead in the water. Some IOCs have already shut-in production in a bid to ride out the storm, while reduced investments elsewhere will mean a gradual loss of production from recent highs of around 500,000 b/d is inevitable (MEES, 22 May). (CONTINUED - 1205 WORDS)