Kurdistan has told producers that it is cutting payments for oil production, in light of continued pressure from COVID-19.
Gulf Keystone Petroleum, Genel Energy and DNO issued statements this morning on the move. Neither company has accepted the terms. They have said they expect to hold talks with the government.
The Kurdistan Regional Government (KRG) has proposed an amendment for terms starting with the March 2021 production invoice.
Dated Brent has continued below $50 per barrel, the KRG has said. Previously it has said that for each cent above the $50 per barrel dated Brent monthly average it would pay 0.5 cents.
Now it intends to cut this to 0.2 cents. This is equivalent to a move from 50% of additional revenues to 20%.
This programme of payments was intended to help Kurdistan catch up with a previous shortfall, incurred from November 2019 to February 2020.
The KRG also intends to pay invoices 60 days after submission.
Genel said its override payments of 4.5% of revenues from Tawke would continue.
Gulf Keystone said outstanding invoices it was owed for the November 2019 to February 2020 stood at $65 million.
The company has also announced the payment of a special dividend of $25mn, taking the total proposed pay out to $50mn. As of May 12, it said it had $179mn in cash.