The Kurdistan Regional Government’s (KRG) Ministry of Natural Resources (MNR) announced Thursday that the Kurdistan Regional Council for Oil & Gas Affairs has approved the allocation of $75-$100 million of the revenue from the KRG’s direct crude oil sales as payment for exporting international oil companies (IOC).
According to the MNR, the first tranche of regular payments will be made during the first half of September 2015. The MNR had previously stated on August 3, 2015 that producing IOCs would be paid a portion of the revenue from direct crude oil sales, on a monthly basis, from September 2015 onwards. In its latest statement the MNR said that as oil export rises in early 2016, the KRG envisaged “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 latest development follows Gulf Keystone Petroleum’s announcement Thursday that it was owed $283 million as of June 30, 2015. From the total figure, $117 million was owed for unbooked revenues, $76 million for past costs associated with the Shaikan Government Option and $90 million for past costs associated with the Shaikan Third party option. In its half year 2015 results statement, Gulf stated that the KRG’s payment of its debts “will be the key to unlocking further investment and realising the potential of…[Gulf’s] assets”.
Gulf Keystone Petroleum suspended trucked exports of crude back in February due to delayed export payments from the Kurdish government, according to a report from Reuters. Another company affected by the lack of payment from the KRG is Genel Energy, who was owed $233 million on March 5, 2015, for oil sold to the Kurdistan Regional Government.