Low prices and payment delays reverse two-year expansion of Kurdistan’s oil sector
The KRG's production is falling as cash flows dry up and companies pare back investment.
Pumps at a well at the Tawke oil field in Iraqi Kurdistan operated by Norway's DNO. (SEBASTIAN MEYER/Metrography/Iraq Oil Report)
Oil production in Iraq's semi-autonomous Kurdistan region has fallen 10 percent so far this year, as oil companies respond to shrinking cash flows by reducing capital expenditures and laying off staff.
The contraction of Kurdistan's oil sector marks the end of two years of steady growth powered by relatively high oil prices and a government commitment to make timely payments to companies. Now, however, the Kurdistan Regional Government (KRG) has fallen behind on its invoices, and oil prices are so low that many fields can barely turn a profit.
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