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'For crude oil sales into the ITP from 1 January 2023 to 25 March 2023, capacity building payments were deducted from the monthly crude oil sales invoice amount payable to Gulf Keystone and no direct payment was made to the KRG. For local sales from 19 July 2023 to 31 December 2023, the KRG received capacity building volumes in kind, which they then sold to local buyers.'
This we knew ages ago.
"The value of licence, rental and security fees has been accrued and is not expected to be paid, but rather offset against historic revenue due from the KRG, which have not yet been recognised in the financial statements."
It will take a very long time to whittle down $152 million in this manner. Make no mistake, we need a return to exports to recover the arrears in a timely manner.
For FY2022 the equivalent figure was $25.009M – so the 2023 figure of $7.522M is a reduction, reflecting the company's ability to pay in the good year ‘22 and the inability (unwillingness?) to do so in the bad year of '23 (and at least reflects the willingness of the KRG to put the payment to one side for the moment).
As stated, the “owing” of this $7.522M sum has yet to be reflected in the financial statements, but it will be offset against the outstanding sums due to be paid by the KRG.
So, at this moment, $152M - $7.522 (give or take), indicates Co is still owed ca $144M (end-Dec-23). Depending on when things return to normal and revenues increase as hoped, this sum could increase and continue to be carried forward or it could be whittled down to zero inside a year.
As I see it.
Https:// www.rudaw.net/english/middleeast/iraq/280420242
ERBIL, Kurdistan Region - Kurdistan Region President Nechirvan Barzani and Iraqi President Abdul Latif Rashid met in Baghdad on Sunday to discuss numerous topics including the need to strengthen ties between the Iraqi and Kurdish governments.
“Both leaders emphasized the need to promote economic development and enhance services, while also expressing support for the federal government in implementing its agenda. The dialogue between Erbil and Baghdad, aimed at resolving their issues in accordance with the Constitution, was also a key topic of discussion,” said a statement from the Kurdistan Region Presidency.
President Barzani arrived in Baghdad on Saturday for meetings with Iraqi Prime Minister Mohammed Shia’ al-Sudani and the ruling State Administration Coalition. It is his second trip to the Iraqi capital in a month and comes against the backdrop of Sudani’s trip to Washington and a deadly drone strike on key oil and gas infrastructure in the Kurdistan Region.
During the meeting with Rashid, Barzani “reiterated the Kurdistan Region’s willingness to engage in dialogue and find mutually agreeable solutions with Baghdad,” and emphasized the importance of visits from both Erbil and Baghdad to continue.
As part of his Baghdad visit, Barzani also separately met with several senior Iraqi political leaders, including Leader of the State of Law Coalition Nouri al-Maliki, Leader of Iraq’s National Wisdom Movement Ammar al-Hakim, President of Iraq’s Supreme Judicial Council Faiq Zidan, former prime minister Adil Abdul-Mahdi, and former speaker of parliament Mohammed al-Halbousi. The meetings are expected to continue.
Yes I agree! It seems quite positive. One more thing I would add to your observations: it gives the impression that KRG and IOCs (or at least GKP) are carrying on with the PSC 'business as usual' (at least as much as we can call it 'usual' given the circumstances/this part of the world).
Sends a signal to Baghdad (?): "we're carrying on with the PSCs, which remain valid"
In the context of gggg21's post of KRG MNR's strong public announcement (Https ://gov .krd/mnr-en/activities/news-and-press-releases/2024/april/statement-by-the-ministry-of-natural-resources-of-krg/), this suggests KRG and IOCs/GKP have adopted a common position vis-a-vis Baghdad.
Moreover, KRG elections recently postponed (a result of KDP standing firm with their boycott?) and Nechirvan Barzani in Baghdad this weekend meeting with Al-Sudani and the interim parliamentary speaker also seem to signal ongoing backdoor discussions regarding a final resolution (source: hxxps :// www. kurdistan24. net/en/story/34720-Kurdistan-Region-President,-Iraqi-premier-highlight-latest-political-developments-in-Iraq)
Regarding the GKP, any dear accountants/quants who can forecast how the value of licence, rental and security fees could make a dent in the $151m owed, and over what timelines?
Makes sense Mendoza,
Also signals a very important points which are very significant indeed.
That is firstly the KRG recognise a financial obligation to the IOC's. (not theft), secondly its demonstrating a willingness to repay, even though they are being financially squeezed currently.
it also helps us out by reducing ongoing costs.
A way for KRG to pay down the $151m owed to GKP??
"The value of licence, rental and security fees has been accrued and is not expected to be paid, but rather offset against historic revenue due from the KRG, which have not yet been recognised in the financial statements."
In my view, this seems like a positive to GKP's cash position.
However, I'm not an accountant - any on here?
From ADVFN, haven't checked the wording of it.
"What do people make of this at the end of the Thursday RNS:
'For crude oil sales into the ITP from 1 January 2023 to 25 March 2023, capacity building payments were deducted from the monthly crude oil sales invoice amount payable to Gulf Keystone and no direct payment was made to the KRG. For local sales from 19 July 2023 to 31 December 2023, the KRG received capacity building volumes in kind, which they then sold to local buyers.The value of licence, rental and security fees has been accrued and is not expected to be paid, but rather offset against historic revenue due from the KRG, which have not yet been recognised in the financial statements.'"