Baghdad and Erbil both face mounting pressure from foreign oil firms over delayed and deferred payments, as the plunge in oil prices has thrown a spanner into the already complex workings of their respective energy sectors. Two of the four key producers in Iraqi Kurdistan have halted exports in favor of sales into what is set to become an increasingly crowded KRG domestic market. In the south, the deterioration in the quality of Basrah Light crude, compounded by bad weather delays and payment difficulties to the foreign oil companies will make it hard for Iraq to meet its export 2015 target.
Iraq’s 2015 federal budget, this week signed into law by President Fuad Ma’sum, is based on oil exports of 3.3mn b/d, including a 250,000 b/d KRG contribution plus 300,000 b/d of crude from northern Iraqi fields to be shipped to the Turkish port of Ceyhan through a pipeline transiting KRG territory. In theory this should have resulted in the release of 17% of federal expenditure to the KRG from January, though transfers await the president’s final signature before the budget law can be published in the official gazette and go into force. (CONTINUED - 2593 WORDS)
