Iraq’s Kurdistan Regional Government (KRG) has stepped up its lobbying in Baghdad in a bid to facilitate a restart in its pipeline exports to Turkey’s Mediterranean port of Ceyhan, and to secure full payments from Iraq’s budget. The pipeline closure has forced the near-total shut-in of oil production in Kurdistan. And the longer shut-ins continue, the less likely it is that the KRG will be able to meet its obligations to supply federal oil marketer Somo with 400,000 b/d when the pipeline reopens.
The situation is critical for the KRG, and for the IOCs which form the backbone of its upstream sector. Even while shedding staff, halting investments, and in some cases making modest sales to local refineries, smaller IOCs face an existential struggle, whilst the pipeline closure contributed to Chevron and Genel recently quitting the Sarta field (MEES, 4 August). (CONTINUED - 1131 WORDS)
