Kurdistan’s independent oil sector is increasingly feeling the strain from last year’s acrimony with Baghdad. Even though political leaders in Baghdad and Erbil are voicing optimism over negotiations on resetting the relationship, crucial monthly budget payments to Kurdistan have yet to resume. Without these payments, the KRG’s ability to improve payment reliability to IOCs in the region is highly questionable.
The cash-strapped government in Erbil has been struggling to pay IOCs for oil production in recent months. Its self-imposed target of making payments within 60 days of the end of the month has disappeared. Firms only last week began confirming receipt of payment for August production, leaving arrears for September-November output still due (MEES, 27 January). (CONTINUED - 786 WORDS)