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KRG reaches landmark deal with DNO and Genel

Settlement of outstanding debt in exchange for assets is effectively a reset button for the Kurdistan oil sector, which is likely to quicken pace of production growth.
A worker walks past a storage unit at the Tawke oil field in Iraqi Kurdistan. Norwegian oil company DNO is extracting oil in the Kurdish region of Iraq. (SEBASTIAN MEYER/Metrography/Iraq Oil Report)

Iraq's autonomous Kurdistan Regional Government (KRG) on Thursday gave extra project equity and profit payments to two of its earliest international oil investors to absolve outstanding debts - a deal that could seriously reduce financial risk and pave the way for quicker growth in the industry.

Neither Norway's DNO nor the KRG's Ministry of Natural Resources (MNR) have made public the amount of unpaid exports and other receivables – estimated by Iraq Oil Report at more than $1 billion – that will be waived in the deal, making it difficult to assess the total value for shareholders and KRG citizens. Genel said it was owed $471.2 million in unpaid exports since 2014. (It's unclear if any Tawke or Taq Taq oil sold by SOMO in 2009 under a short-lived political deal was also written off.)

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