Mounting Debt Obligations Take Shine Off Of KRG Oil Revenue Boost

8 Apr 2022 Issue: 65 / 14 By: Jamie Ingram

The KRG’s gross oil revenues surged in 2021, but debt repayments meant the net boost was much more modest. For 2022, debt repayments will continue to dampen the benefits of recent price gains, although at least increased IOC capex should provide a modest output rebound.

2021 was a mixed year for the Kurdistan Regional Government’s (KRG) oil sector operations and many of the same constraining factors will be in play this year too. On the one hand, net oil revenues surged by nearly 70% to provide the government with a much needed $3.96bn for 2021. On the other hand, this amounted to just 43% of gross revenues, which was by far the lowest share on record, as the KRG’s debt obligations came to the fore.

The outlook for 2022 is somewhat more positive for the KRG. With Brent averaging nearly $100/B in Q1, gross export revenues are set to surge this year and that will also lift net revenues. Moreover, the KRG’s share of gross revenues did increase in the second half of the year and with some IOC payment commitments expiring in July 2022 that trend ought to continue this year. (CONTINUED - 1553 WORDS)