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LONDON (Alliance News) - Genel Energy PLC Friday said it has received its fifth consecutive monthly payment for the oil its exports out of the country from the Taq Taq field in the Kurdistan region of Iraq, as well as a backpayment for oil that was previously exported.
The Kurdistan regional government has made a total payment to Genel and its partner on the field of USD16.3 million for the oil exported out of the country via the Iraq-Turkey pipeline during January, with Genel receiving a USD9.0 million share.
Importantly, Genel said an additional payment of USD3.2 million has been made to the joint venture, of which Genel's share is USD1.8 million, for backpayments owed to the joint venture for oil that has been previously exported.
The payments received in the last four months of 2015 only covered the oil that was being exported during those months - with the backpayment Friday signalling the government's intention to begin clearing the large amounts owed to foreign companies operating in the region.
Genel is owed a considerable sum in backpayments from the regional government, around USD403.2 million. The regional government owes more in backpayments to Genel than any other foreign company operating in the region, including fellow producer Gulf Keystone Petroleum PLC - which is also owed money.
Gulf Keystone had previously said the regional government planned to begin clearing the debt owed to foreign companies during 2016, and Genel Friday said the government will increase the backpayments being made as oil prices rebound.
Both Genel and Gulf Keystone have been trying to form a formal payment system for the oil it exports out of Iraq, and although no formal deal has been struck, payments have remained consistent over the last five months providing both companies with some certainty and visibility and the government's move to begin clearing its debt to foreign producers will be a very welcomed boost.
Genel failed to hit its revenue or production target in 2015 and warned last month that revenue and production were both expected to fall steeply this year thanks to lower oil prices.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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