KRG’s dispute with Iraqi government could halt oil exports

Written on March 30, 2012 by Editor in KRG, Kurd news, Oil

News from The Kurdistan Tribune:

The dispute between the Iraqi federal government and the KRG could cause a halt to oil exports from Kurdistan.

According to sources close to the KRG minister for natural resources, exports of crude oil have fallen to 50,000 barrels a day from a peak of 175,000 barrels a day.

The long dispute between Iraq and the KRG has created many complications for oil production in the region and it is currently causing panic among foreign companies, especially BP, Genel Energy and Gulf Keystone. Recently the shares of Mexican oil giant Gulf Keystone dropped from almost £4 to £2.50.

The source of the latest problems is the Iraqi government’s failure to pay foreign companies 1.5 billion dollars for their work in Kurdistan.

The Iraqi state says it is withholding this money because the KRG owes it an equivalent sum in revenues from oil production. At the same time the KRG is using the threat of a halt to exports to try and press Baghdad into meeting its obligations to the foreign companies.