As the Kurdistan Regional Government (KRG) clarified its export payment system to foreign oil companies, Shares of Gulf Keystone, Genel Energy and DNO rose significantly.
Gulf Keystone rose 20% to 14.75 pence in the London market--the most it has risen since August. In Oslo, Genel's shares rose 7.75% to 112.5 pence and DNO increased 17%.
International oil companies will receive monthly payments from KRG 'based on rights under production sharing contracts for each license, adjusted for the quality of crude produced and the cost of transporting it to market,' according to the government website.
KRG will also provide companies with a 5% 'netback revenue' from each oil field to assist producers in recovering money owed to them.
This new agreement, effective January 1st 2016, replaced an already agreed September arrangement that allowed for monthly payments of $75m.
This agreement aims at nulling the decades of disagreement over whether revenue should be shared between the regional government and Iraq's central federal government.
KRG has been able to pay funds owed to companies more regularly, having made four in the past five months from the $1.7 b sales since December.