Iraqi Kurdistan Pays Oil-Company Dues as Rally Boosts Funds

  • Producers get $53.9 million for October exports, arrears
  • Companies are still owed for deliveries in November, December

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 Plc and Gulf Keystone Petroleum Ltd. received a combined $53.9 million for oil sold in October as well as arrears, they said Monday. The Kurdistan Regional Government, or KRG, paid for their September exports on Dec. 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 percent.

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 totaled about $1 billion in November, almost equaling the company’s market capitalization.

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 $38.9 million, to be shared with partner Genel. Gulf Keystone received $15 million for oil sold from the Shaikan field.

“Payment is welcome, although they are taking longer to be received,” Cenkos Securities Plc 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.”

DNO rose as much as 2.2 percent in Oslo trading, and was up 0.7 percent at 9.25 kroner as of 1:13 p.m. local time. Gulf Keystone climbed 1 percent in London, while Genel erased gains to trade down 1.2 percent.

— With assistance by Mikael Holter

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