LONDON, Feb. 6 (UPI) -- Exports from the Kurdish north of Iraq through Turkey are suspended while payment negotiations continue, Gulf Keystone Petroleum said Friday.
The British company said it's owed an unstated amount in payments from the Kurdish government. As a short-term measure, crude oil was redirected to the local market and exports by truck through Turkey are suspended.
"This is expected to be a short term measure until a regular payment cycle can be established for sales via the export route," the company said.
In the meantime, the company said it was working on finding ways to get crude oil from the Shaikan development in the Kurdish north out of the region through pipeline networks.
Last month, the company announced with its Hungarian partner MOL it was now producing oil from seven wells in the Shaikan development in the Kurdish north. Production and export sales from the region increased nearly 300 percent last year.
Gulf Keystone was upbeat when, in December, the Kurdish and Iraqi central governments brokered a deal ending a simmering impasse over who controls what parts of the oil sector in the country.
The semiautonomous Kurdistan Regional Government under the terms of the agreement funnels 250,000 barrels of oil per day to Baghdad and agrees to use the federal State Oil Marketing Organization for marketing.
"Further to the oil export agreement between the KRG and federal government of Iraq reached in December 2014, and the recent passing of Iraq's 2015 federal budget, we remain confident that a stable payment cycle will be established in the near term, and we expect to receive payment for all past and ongoing oil sales from Shaikan," Gulf Keystone Chief Executive Officer John Gerstenlauer said Friday.
As of Dec. 29, Gulf Keystone and MOL said a record number of 354 trucks crossed the Turkish border with a combined 58,000 barrels of Shaikan crude oil for export sale.
