Page 12 - MEOG Week 20 2021

MEOG POLICY MEOG

KRG revises arrears payment terms

KURDISTAN THE Kurdistan Regional Government (KRG) has also stated that, should markets see substan-
last week informed IOCs operating fields in the tial volatility, it will re-evaluate this payment
semi-autonomous region of its intention to slow model”.
its repayment of arears from 2019 and 2020. Meanwhile, DNO said it was “reviewing its
Norway’s DNO, London-listed Genel Energy position and will engage with Kurdistan to seek
and Gulf Keystone Petroleum (GKP) and Can- agreement regarding payment terms, interest on
ada’s ShaMaran Petroleum all reported that the the arrears and revised lifting arrangements”.
Minister of Natural Resources Kamal Moham- For its part, GKP softened the blow to share-
mad Atroshi had informed them in writing of holders by announcing a $25mn special div-
the KRG’s intention to reduce the IOCs’ share idend, taking total dividends for the year to
of incremental revenues in months when Brent $50mn.
crude averages above $50 per barrel. The KRG still owes hundreds of millions
This had been agreed at a 50:50 split, but Erbil of dollars in arears, with UAE-based Dana
now intends to lower the companies’ share to Gas owed $14.8mn, DNO $218.2mn, Genel
20% while extending all invoice payment terms $151.2mn, GKP $65.2mn and ShaMaran
to 60 days. $38mn, according to public updates.
In their individual statements, the companies Erbil and Baghdad came to an agreement in
noted that they had not been consulted on Erbil’s on the Iraqi budget in April following months of
proposal, nor had they accepted it. Kurdistan’s wrangling between the federal and semiautono-
struggles with the Covid-19 pandemic were mous authorities.
cited as the reason behind the move, which fol- The agreement pegs the 2021 budget at 130
lows 14 consecutive months of timely payments trillion dinars ($89.65bn) with deficit estimated
to operators after a hiatus from November 2019 at 28.7 trillion dinars ($19.79bn).
to February 2020. With the country 97%-reliant on oil exports,
Genel said that the KRG’s override payments the budget is based on an oil price of $45 per bar-
would continue, and this is presumed to remain rel with total exports averaging 3.25mn barrels
in place for all operators. It added that “the KRG per day (bpd).™

Confusion over Iran-

Saudi discussions

IRAN/SAUDI IRAN has denied reports that it asked Saudi Ara- on breaking the economic bottleneck Tehran
bia to help sell its crude and circumvent US sanc- has suffered since the administration of former
tions in exchange for limiting Houthi attacks on US president Donald Trump withdrew from
the kingdom’s oil facilities. A report by Middle the nuclear agreement in 2018 and reimposed
East Eye made the claim quoting Iraqi officials wide-ranging sanctions on the country. It was in
familiar with negotiations taking place in Bagh- this context that the Iranians apparently called
dad, however, Iran’s Foreign Ministry dismissed on the Saudis to help them sell their oil once
the reports as untrue. again.
Tehran and Riyadh broke diplomatic ties in “They offered to sell it to the Saudis at a price
2016, but the regional arch-rivals began a series lower than international prices on the condition
of direct talks in the Iraqi capital in April. that the Saudis sell it on the world markets in
The latest round of secret discussions report- their own way,” the official told MEE.
edly included the presence of a limited number Iran currently relies mainly on the United
of Iraqi officials who participate in the meetings Arab Emirates and Oman to sell its oil infor-
by “contributing to the convergence of views and mally, and needs another regional outlet to
moistening the atmosphere”. bypass the US-imposed blockade.
During this conversation, the Saudis are said This week, spokesman for the Iranian For-
to have sought to guarantee the end of attacks, eign Ministry, Saeed Khatibzadeh, categorically
nearly daily in recent months, by Iranian-backed denied the reports, saying only that “talks are
Houthis on its oil and economic institutions. continuing and focus on bilateral, regional and
The Iranians were reported to have focused international issues.”™

P12 www. NEWSBASE .com Week 20 19•May•2021