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By Aland Mahwy:
Ten days after the London court ruling against the Kurdistan Regional Government (KRG) in its long standing dispute with Dana Gas, the Anglo-Turkish exploration and production company, Genel Energy, is demanding the KRG pays it, within one month, $375 million.
On 13 July 2015, Genel Energy’s chairman, Tony Hayward, said his company is expecting to receive $375 million from the KRG for its work conducted in the region. According to Hayward, the continuity of oil exports make it possible for the KRG to pay the oil companies on time. “The KRG is now financially capable of paying its contractors”, he said.
The KRG’s financial crisis began at the start of last year, when Baghdad cut off its 17% share of Iraq’s national budget and, as a result, it was unable to pay the oil companies operating in the region on time.
By the end of 2014, the KRG owed $230 million to Genel Energy though, according to the latest updates from the company, the debt had risen to $375 million last month. Furthermore, the company claims to have “lost $312.8 million between 2014 and 2015”, although it remains optimistic about the mechanism put in place by the KRG to sell domestically, “which allocates 50% of revenues from Taq Taq output to the company”.
While the KRG’s financial crisis continues, along with its difficult relations with Baghdad, the international oil companies operating in the Kurdistan Region are reviewing their financial accounts — trying to minimise the damage caused by the war with ISIS and the financial crisis. Genel Energy has decided to halt its exploration in the Kurdistan Region until the end of 2015, as a result, reducing its expenditure from $200 million to $150 million. It is one of the main oil producing companies in the Kurdistan Region, owning 44% of Taq Taq, 25% of Tawke and 44% of both the Miran and Bnabawe gas fields.
Too right!
It’s time to pay up! AND please please pay GKP too!
Let bygones be bygones. I don’t think so!
It’s completely understandable that Genel Energy want their payment, but it’s double standards that USA and Britain want all aid and military support for KRG to go through Baghdad, when Baghdad almost always holds back KRG’s share, trying to force KRG into favourable decisions through financial difficulty.
I hope the dispute is resolved because KRG is an excellent partner in the ME to do business with, provising huge opportunities. But the internal community need to start dealing with them directly, rather than appease the politics of Baghdad. It will lift a lot of business barriers almost immediately.
[…] be paid, but it is unclear when that might happen. They continue to operate, although Genel has called off further exploration until at least the end of 2015. The uncertainty has caused their share prices […]