Erbil, Kurdistan Region, Iraq - The Ministry of Natural Resources (MNR) has today authorized the first tranche of regular payments to the exporting international oil companies (IOCs) in the Kurdistan Region.
Consistent with MNR’s prior consultation with the Kurdistan Region Council for Oil and Gas Affairs, MNR approved the allocation of $75 million of revenue from the Kurdistan Regional Government’s direct crude oil sales in Ceyhan as payment on account to TTOPCO as operators of the Taq Taq block ($30m), DNO as operators of Tawke ($30m), and Gulf Keystone Petroleum as operators of Sheikhan ($15m).
MNR authorized the payments to be wired into these companies’ accounts during the next seven days.
Crude oil export is the principal revenue earner for the Kurdistan Region and helps to pay civil service salaries, maintain vital government services and defend the Region against Islamic State terrorism.
Unfortunately, the steep fall in the price of oil means the KRG continues to struggle to cover its minimum financial needs. But it is also recognized that it is unrealistic to expect the IOCs to be able to sustain oil export at current levels without receiving some of their financial dues on a predictable basis.
Regular payments will be needed to allow the exporting companies to cover their ongoing expenses and plan for further investment in the oil fields, which will in turn boost production and thus help the people of the Kurdistan Region.
As oil export rises in early 2016, the KRG envisages making additional revenue available to the exporting IOCs to enable them to begin to catch up on the past receivables due under their production sharing contracts.
The KRG acknowledges and appreciates the contribution to the Kurdistan Region made by the IOCs in a challenging environment and their performance this year in raising oil export from Kurdistan to record levels.