Iraq's autonomous Kurdish region announced late on Monday that, as of September, it would make payments to independent oil companies operating there. Revenue from direct oil sales will be allocated to cover expenses of independent oil companies producing in the territory, the Kurdish Regional Government's (KRG) Ministry for Natural Resources said.
The KRG is supposed to receive 17 percent of the national budget from the Iraqi central government to reimburse it for oil provided to the national oil company for sale, according to an agreement signed by both parties at the end of last year. But a dispute between the Kurdish region and Baghdad has kept the KRG from receiving the payments. This has caused a cash crisis for the region, one that has prevented it from reimbursing independent oil producers on its territory.As a result, the region has begun exporting oil to international markets. Revenue from these exports will now be used to pay the independent producers, as well as to pay public-sector expenses.
There has been no comment from the Iraqi government on the announcement. Norway's DNO, Genel Energy and Gulf Keystone Petroleum are the companies expected to profit from the move.