Trader pays KRG advance as flows resume
3/14/2016 0 Comments
ERBIL, March 14, 2016 – International commodity trader Glencore has reportedly paid the Kurdistan Region Government (KRG) an advance of USD 300 million, Reuters reported over the weekend. The news follows on the heels of the resumption of crude flows to international markets on Friday after a three-week pipeline outage that had halted exports from the Kurdistan Region of Iraq.
According to industry sources quoted by Reuters, Glencore’s move is an effort to obtain a share of oil exports from the Kurdistan Region of Iraq, a market dominated by Vitol and Petraco Group. Flows resumed on Friday and allocations are expected to be made from June onwards. Glencore was unavailable for comments.
The pipeline outage that began on February 17 more than halved the KRG’s revenue from oil exports. Last month, it netted USD 303.9 million, down from around USD 650 million in January. As a response, Turkey made a USD 200 million emergency payment last Friday to cover budget shortfalls, the same source told Reuters. The KRG needs at least USD 760 million per month to cover government salaries.
While the KRG hopes to restore crude oil flows to some 600,000 bopd, a decision by the Ministry of Oil on Friday ordering the North Oil Company to halt exports from the Kirkuk field could result in losses of some 150,000 bopd on average if upheld. The Ministry of Oil was scheduled to discuss the matter on Sunday, but no announcement on a possible resumption of Kirkuk crude exports had been made at the time of writing.