The government of Iraqi Kurdistan paid international oil companies for the first time in seven weeks, as rising crude prices gave a much-needed boost to the region’s coffers.
DNO ASA, Genel Energy and Gulf Keystone Petroleum Ltd received a combined $53.9mn for oil sold in October as well as arrears, they said on Monday. The Kurdistan Regional Government, or KRG, paid for their September exports on December 5 and still owes them for November and December.
The KRG has struggled to keep up regular payments to international contractors. Hurt by crude’s collapse, it’s also suffered from a long dispute over revenue-sharing with the federal government, an influx of Iraqi refugees and a protracted war with Islamic State militants. Financial strains have eased since oil-rich nations agreed last month to curb supply, pushing up crude prices almost 20%.
The oil companies and the regional authorities have agreed on a new monthly payment schedule, according to people with knowledge of the matter. Producers have said they need regular remittances in order to invest and boost output. They’ve also requested payment for past oil sales. In the case of DNO, arrears totalled about $1bn in November, almost equalling the company’s market capitalisation.
DNO operates the Tawke field, which pumped an average of 108,122 barrels a day in October, the Oslo-based company said in a statement. It received payment of $38.9mn, to be shared with partner Genel. Gulf Keystone received $15mn for oil sold from the Shaikan field.
“Payment is welcome, although they are taking longer to be received,” Cenkos Securities said in a note, commenting on Genel and Gulf Keystone. “The element of back-costs remains small and isn’t making a huge dent in the receivable.”
