ERBIL, Kurdistan Region — The Kurdistan Regional Government (KRG) on Thursday released data of its revenues and expenses for the first six months of 2021, showing that it operates with a deficit every month, even when Baghdad sends money. According to data obtained by Rudaw English, the KRG has brought in an average $562 million monthly for the first six months of the year, while total expenses of the government stood at a monthly average of $702 million. Even in the months of July and August when Baghdad sent $135 million to the regional government, the Kurdistan Region still spent an average of $5 million more per month than it brought in. The KRG's biggest expense by far is its payroll and it has struggled to pay its employees in full and on time for several years because of several factors including budget disputes with Baghdad and low oil prices during the coronavirus pandemic. The government imposed austerity measures, cutting pay cheques for some of its employees. In the first six months of the year, the KRG's average revenue from oil was around $350 million. It also brought in $195 million from local revenues and $17 million from support provided by US-led coalition forces. It paid out $617 million for salaries monthly, $60 million for ministry budgets, and $25 million for government investment projects. The oil revenue declared by the KRG is after payments are made to the oil companies. Kurdistan Region's Minister of Natural Resources Kamal Atroshi in late June attended a parliamentary session to answer questions about the government's finances. He said at the time that 40 percent of the money from oil sales is spent to cover oil sector costs - 20 percent for production costs, 14 percent in payments to international oil companies, and around six percent for transportation. Atroshi added that at times, because the government is repaying its debts to the oil companies, costs reach around 58 percent of the total income. There are 52 oil blocks in the Kurdistan Region, 16 of them are in production and 15 are in exploration phases. Over 30 international and local companies are working in the sector. Many of the contracts were signed with prepayment schemes and the Kurdistan Region owes a large amount of money. In late June, the Council of Ministers Secretary General Amanj Raheem told parliament that the KRG owes around $4.3 billion to oil companies. The government has also said it inherited a $28 billion debt from the previous administration. Among the many companies that the KRG still owes money to is Genel Energy, which in August said Erbil served them notice it intends to terminate two contracts. In late July, the company said they were paid $30.4 million for oil sales during May, but are still owed $141 million. Gulf Keystone Petroleum Ltd. on October 5 said the KRG had paid the company $38.5 million of which $6.4 million was "in relation to the arrears from the outstanding December 2019 to February 2020 invoices."
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