Glencore, a Swiss mining company is aiming to raise approximately US$550 in order to secure the lucrative Iraqi Kurdistan market. It was approximately two years ago that Iraqi Kurdistan began independently selling oil after Since Iraqi Kurdistan and Baghdad failed to reach an oil sharing agreement when Baghdad stopped sending Iraqi Kurdistan previously agreed monthly oil share payments.
By comparison, Iraqi Kurdistan’s oil rates are much lower in price than other countries due to the risk of Baghdad filing a lawsuit against a potential customer who would potentially be involved with the countries’ crude oil without the federal government agreeing to the deal.
Reuters has reported that Kurdistan Regional Government (KRG) has borrowed approximately US$2 million from Glencore rivals which they aim to repay with oil; Glencore, however, is due approximately US$300 million which they have been repaying in instalments of US$25 million every month,
“Glencore expects to enter into a new five-year agreement with the government of Kurdistan to buy its crude,” Reuters reported.
“Six cargoes a month would represent a quarter of overall exports from Kurdistan and would be worth over $1.7 billion a year at today's price of around $40 per barrel for Kurdish oil, and more than $8 billion over the course of five years,” added the report continued.