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Krg Continues Direct Oil Sales To Overcome Budget Shortfall

KRG reported a 6.5% decline over June when the KRG exported 17,130,639 barrels

Erbil, Kurdistan Region, Iraq (cabinet.gov.krd) – Oil exports from the Kurdistan Region dropped during July due to sabotage of the pipeline through Turkey.

According to the monthly Kurdistan Regional Government, KRG, oil export report for July, 16,019,090 barrels of crude oil (average 516,745 bpd) were exported through the pipeline through Turkey. This is a 6.5 per cent decline over June when the KRG exported 17,130,639 barrels (average 571,021 bpd).

In an earlier statement, the KRG Ministry of Natural Resources said that since 27 July “there have been sabotage attacks and attempted thefts on the pipelines that carry crude oil from the Kurdistan Region to Ceyhan in Turkey”. According to the monthly export report, stoppage occurred “in the flow of crude oil to Ceyhan for 111 hours”.

Of the total amount of oil exported in July, fields operated by the KRG supplied 12,020,683 barrels (average 387,764 bpd) while fields operated by the North Oil Company (NOC) supplied 3,998,407 barrels (average 128,981 bpd).

Iraq’s State Oil Marketing Company, SOMO, in Ceyhan received 2,201,540 barrels (average 71,017 bpd). The KRG intended to deliver to SOMO a further two million barrels at the end of July, but was unable to do so due to the pipeline interruption.

According to the report, the KRG continued its direct oil sales in Ceyhan in July in order to compensate the Region for the budget shortfalls from the federal government and to pay debts incurred during 2014.

The KRG has, however, announced it will continue to work with its counterparts in the federal government to reach a resolution on all outstanding oil and gas issues per the joint statement of June 17, 2015 by the KRG’s Regional Council for Oil and Gas Affairs and the five political parties in the Kurdistan Regional Government.

Earlier this week, the KRG Ministry of Natural Resources announced that from September 2015 onwards, the KRG will on a monthly basis allocate a portion of the revenue from its direct crude oil sales to the producing international oil companies, IOCs. Further, with exports anticipated to increase in early 2016, the KRG envisages making additional revenue available. This is important for IOCs to maintain and increase production levels.

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