Kurdistan
Majid Jafar, CEO of Crescent Petroleum and managing director of its affiliate Dana Gas, speaking to Rudaw on October 26, 2023. Photo: Rudaw
ERBIL, Kurdistan Region - Dana Gas has been financially affected by the months-long halt in Kurdistan Region oil exports as the cash-strapped government is behind in its payments, the managing director said on Thursday. The company is working to increase gas production in order to boost electricity generation.
Majid Jafar, CEO of Crescent Petroleum and managing director of its affiliate Dana Gas, told Rudaw’s Diyar Kurda that the Kurdistan Regional Government (KRG) has not been making regular payments since its oil exports were stopped by Turkey more than half a year ago.
“Physically speaking, we have not been affected by the pipeline closure because we are supplying gas for the power stations in the Kurdistan Region… But there have been some delays in the payments. We have been getting some payments,” he said.
Ankara stopped exports of Kurdistan Region’s oil through its Ceyhan pipeline in March after the International Chamber of Commerce arbitration court ruled that Turkey had breached a 1973 pipeline agreement with Iraq when it permitted Erbil to export oil without authorization from Baghdad.
The halt in exports has cost the KRG billions of dollars.
The KRG is, however, earning some money from its gas. It “has been receiving revenue from the gas that we provide because there is electricity being sold also to the federal government,” said Jafar.
He noted that they are working with the Kurdish government to “make sure there is a schedule for paying the past payments and to make sure that going forward we will receive the payment on time for the gas.”
Dana Gas produces 500 million standard cubic feet of gas per day in the Region. In January last year, the UAE-based company reported that natural gas production in their operations in the Kurdistan Region had jumped by 50% since 2018.
Last year, Jafar told Rudaw that they planned to double gas production. Speaking on Thursday, he said that receiving payments on time is very important for any production growth or future projects.
“The regular payments are of course very important for the lenders, for the investors, for the board of companies and so on,” he said.
He refused to say how much the KRG owes Dana Gas, but said there are “significant unpaid receivables.”
Expectations are that increased gas production would boost electricity generation in a region where customers have to rely on private, diesel-fueled generators to supplement power from the national grid that cannot keep up with demand.
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