The Kurdistan Regional Government has confirmed it plans to release payments to oil producers for exported crude.
In a statement the semi-autonomous region said that the first tranche of payments would take place in the first half of September.
Between US$75mln and US$100mln of revenue from the KRG’s direct crude oil sales will be distributed to oil companies, the KRG said.
The cash will be allocated ‘in broad proportion’ to the respective companies past and present contributions to export.
“Regular payments will allow the exporting companies to cover their ongoing expenses and plan for further investment in the oil fields, which will in turn boost production,” the statement said.
“As oil export rises in early 2016, the KRG envisages making additional revenue available to the exporting IOCs to enable them to begin to catch up on the past receivables due under their production sharing contracts.”
London-listed Genel Energy (LON:GENL) will be among the companies to receive payments.
The company, which is expected to average net production of 90,000 to 100,000 bopd for 2015, is one of the main oil exporters in the region alongside its partner DNO.
Together the companies are partnered in the Taq Taq and Tawke fields, with Genel owning 44% and 25% respectively.
Tawke this month set a new production record, with an average of 153,346bopd in the second quarter. More than three quarters of Tawke’s crude is exported.
Taq Taq, meanwhile, produced an average of 128,000 bopd through the first half of 2015, and more than 60% was supplied for export.
Gulf Keystone Petroleum (LON:GKP) is set to be another recipient of cash from the KRG, though its export operations have been smaller and has mostly be limited to trucking operations. It revealed this morning a US$77mln loss for the first six months of this year.
The company reported a 61% rise in first half revenue to US$30.1mln, versus US$18.7mln in 2014, and said it had US$117mln of unbooked revenue up to June 30. Arrears due to the company, however, now amount to around US$283mln.
Production from GKP’s Shaikan has so far peaked at around 45,000 bopd. And GKP has been delivering around 20,000 barrels of crude via a trucking operation to the Turkish coast as well as 20,000 barrels to the export pipeline.
The oil firm, which raised US$40mln in March, ended June with US$63.9mln of cash and that included US$32.5mln of restricted cash to service debt. GKP said it continues to manage expenditure in a prudent manner.
Cursory analysis suggests the company will be keen to see the start of monthly oil payments from the Kurdistan Regional Government (KRG).