Erbil, Kurdistan Region, Iraq (cabinet.gov.krd) - In August, direct oil export from Kurdistan Region continued despite sabotage and attempted theft on the export pipeline inside Turkey borders, which occurred on 27 July and extended to the first week of August.

According to the Kurdistan Regional Government, KRG, Ministry of Natural Resources Oil Export Report, in August Kurdistan Region has exported 14,657,798 barrels of crude oil, an average of 472,832 bpd, through the Kurdistan pipeline network to the port of Ceyhan in Turkey. This is an 8.5 per cent decline comparing to 16,019,090 barrels which were exported in July.

The decline, according to the report, was due to nine days of downtime for the export pipeline which mostly occurred at the beginning of the month.

Of the exported amount, fields operated by the KRG contributed 10,958,817 barrels, an average of 353,510 bpd, while fields operated by the North Oil Company, NOC, contributed 3,698,981 barrels, an average of 119,322 bpd.

In August, the Kurdistan Regional Government delivered a total of 1,579,004 barrels, an average of 50,936 bpd, to the Iraqi State Oil Marketing Company, SOMO.

The monthly export report said that in August, the KRG “continued its direct oil sales in Ceyhan to compensate the Region for the budget shortfalls from the federal government in Baghdad and to continue to pay down debts accumulated in 2014 from pre-payments for direct oil sales” the report highlighted.”

Last week, KRG Ministry of Natural Resources confirmed that the Kurdistan Regional Council for Oil and Gas Affairs expects the first tranche of regular payments to the producing IOCs to be made available during the first half of September 2015.

In an earlier statement by KRG ministry of Natural Resources it was urged that as oil export is expected to rise in early 2016, the KRG envisages making additional revenue available to the IOCs to enable them to begin to catch up on the past receivables due under their production sharing contracts.

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