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Oil companies say KRG payment slow-down puts new investment at risk

A unilateral decision to reduce payment of debts has cast new uncertainty on Kurdistan's oil sector, threatening to deter IOC capital spending and new production growth.
Workers measure the pressure at the Central Processing Facility at the Tawke oil field in Iraqi Kurdistan in August 2012. (SEBASTIAN MEYER/Metrography/Iraq Oil Report)

A decision by the Kurdistan Regional Government (KRG) to change the schedule and terms for payments to international oil companies (IOCs) without prior warning or consultation has stunned the foreign operators and might deal a blow to oil production growth and investment, several officials of IOCs operating in the region told Iraq Oil Report.

"Nobody looks at the news from last week and decides they want to invest more into Kurdistan," said one executive with an IOC operating in the KRG.

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