Iraq Records Oil Export Rise Amid Decline in Revenues

Iraq Records Oil Export Rise Amid Decline in Revenues

Iraq has recorded a rise in exports from its southern oil fields to an average of 3.285mb/d in January, up from 3.215mb/d in the previous month, Al Arabiya wrote. Iraq’s total oil revenues reached $2.26b, down by more than $650m in the last month of 2015 due to plunging crude prices, the oil ministry announced, according to Middle East Online. The country sold as much as 101.84m barrels of oil at the price of $22.21 a barrel of southern crude, down from $29.84 a barrel in December 2015.

Baghdad has halted export through its northern oil pipeline to Ceyhan in Turkey for the fourth consecutive month, while autonomous Kurdistan Regional Government has ramped up its own independent oil sales via the port since mid June 2015. A dispute between KRG and the Iraq’s central government has been escalating over oil export rights and budget payments.

In related news, KRG announced that it would make payments it owes to the international oil companies according to their contractual entitlements in 2016 in a bid to restore confidence and raise production. The payments will be adjusted for crude quality differentials compared with Brent prices, plus deduction of applicable transportation charges will be applied. “These payments will cover the IOCs’ ongoing operating expenses and provide additional incentives and rewards for new capital investments to maintain and increase field production levels,” the Ministry of Natural Resources said in a statement cited by Trade Arabia. After the Kurdistan Regional Government clarified its system of export payments to foreign oil companies, shares of Gulf Keystone Petroleum Ltd., Genel Energy Plc, and DNO ASA rose, wrote Bloomberg.

Iraq’s revenues depend almost entirely on oil export and the country was hit hard by the plunge in global oil prices as it is waging a war against Islamic State controlling swathes of its northern and western territories. The UN has appealed for $861m in humanitarian aid for Iraq to cover an $891m gap between planned Iraqi expenditures on relief operations and available government funds.


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