Kurdistan: an oil region in crisis

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18 August 2020

Kurdistan: an oil region in crisis

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 6 images and tables including:

  • 2020 average production and operating cash flow breakevens
  • Liquid and gas production
  • IOC net annual cash flow
  • Outstanding receivables
  • Net capex per field
  • Government of Kurdistan upstream revenues at post-crash US$50/bbl long-term price assumption

What's included

This report contains:

  • Document

    Kurdistan: an oil region in crisis

    PDF 1.39 MB