Insight
Kurdistan: an oil region in crisis
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Kurdistan is suffering the worst economic crisis in recent years. It has been hit hard by the coronavirus pandemic, plunging oil prices, cash frozen in Lebanese banks and a temporary cessation of payments from Baghdad. Its finances are in a bad shape and its oil and gas industry is severely affected. Once seen as attractive for investments and M&A, IOCs and financial institutions have lost their appetite for the region. Capital expenditure is being cut hard and M&A deals are less likely as the risks of doing business are more visible. Kurdistan-focused companies are suffering from disrupted operations, stagnating production, falling revenues, project delays and late payments from the KRG. They have started taking drastic measures. Exploration is suspended, expansion projects are on hold and production is shut-in at smaller facilities. Higher oil prices may provide some respite, but this will not be enough to set the region on a more sustainable footing. Only structural reforms will.
Table of contents
- The coronavirus pandemic has severely disrupted operations
- The oil price plunge has hammered revenues
- The Lebanese banking crisis has caused payment delays
- Budget payments from federal Iraq are subject to dispute
- Coronavirus restrictions have resulted in production decline
- Uneconomic oil production is being suspended
- Growth is on hold this year
- Expansion projects have been put on hold
Tables and charts
This report includes the following images and tables:
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2020 average production and operating cash flow breakevensLiquid and gas productionIOC net annual cash flow
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Outstanding receivablesNet capex per fieldGovernment of Kurdistan upstream revenues at post-crash US$50/bbl long-term price assumption
What's included
This report contains:
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