June Report – KRG increases its direct oil sale

Erbil, Kurdistan Region, Iraq (cabinet.gov.krd/mnr.gov.krd) – Kurdistan Regional Government, KRG, has increased its direct oil sale in June due to the “significant debt backlog arising from the budget cuts of 2014 imposed by the federal government, and the need to pay down debts accumulated in 2014 from pre-payments for oil sales”, KRG Ministry of Natural Resources said in its June Export Report.

Due to these difficulties, the KRG Ministry of Natural Resources has been obliged to increase its independent oil sale, the report said.

According to the report, KRG tanks in Ceyhan port in Turkey received 17,130,639 barrels of crude oil (an average of 571,021 barrels per day, bpd) in June, through the Kurdistan pipeline network to the port of Ceyhan in Turkey.

Fields operated by the KRG contributed 12,740,711 barrels (an average of 424,690 bpd), while fields operated by the North Oil Company, NOC, contributed 4,389,928 barrels (an average of 146,331 bpd).

In June, KRG supplied 4,493,334 barrels (an average of 149,778 bpd) to Iraq’s State Oil Marketing Company, SOMO, in Ceyhan.

According to the KRG Ministry of Natural Resources Report, the KRG has indepemdently sold 11,893,231 barrels in June.

Following the budget cut imposed by Bagdad early 2014, KRG largely relied on international and local loans in securing the Region’s civil servants salaries and public services spendings.

Kurdistan Region financial difficulties continued in 2015, as the Iraqi Federal Government has, to date, failed to abide by its agreement with KRG reached last December on oil export and budgetary issues.

According to the December agreement, KRG is committed to export 550,000 bpd in return for a budget entitlement close to one billion US dollars per month to be paid by the federal government. The agreement was approved within the framework of the Iraqi Federal Budget Law for 2015.

KRG Ministry of Natural Resources June Report emphasises that, “In 2015, the difficult economic situation facing the Region has been exacerbated by the partial payments made to the KRG by the Federal Government.”

Although, KRG independent oil sales has increased, the report stresses that KRG remains committed to the 2015 Federal Budget Law in its entirety.

“[The KRG] will continue to work with its counterparts in Baghdad to reach a resolution on all the outstanding issues of oil and gas as described in 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”, the report said.

In a statement issued following a joint meeting on June 17, between KRG Regional Council for Oil and Gas and the five political parties in Kurdistan Regional Government, it was stressed that, “If the Federal Government does not abide by the Federal Budget Law, the KRG will be obliged to pursue other legal solutions to settle Kurdistan Region’s financial difficulties and provide the Region’s people with security and other basic necessities in light of Law No 5 of 2013 of the Kurdistan Parliament.”

Full June Export Report

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