ABU DHABI, April 20 (Reuters) - BP has been liftingmore crude oil cargoes in the past couple of months as paymentfor its work in southern Iraq, and is comfortable with thatlevel of shipments, a senior executive of the oil company saidon Monday.
Low oil prices and the fight against Islamic State haveforced Baghdad to delay billions of dollars of cash paymentswhich it owes to international oil companies (IOCs), so theyhave been allowed to take oil shipments instead.
Michael Townshend, BP's president in the Middle East, saidcurrent total production from Iraq's giant Rumaila field wasabout 1.4 million barrels per day and was expected to remainsteady in 2015.
"In terms of the position we have on Rumaila, the paymentshave picked up and I'm comfortable where they are," he toldreporters in Abu Dhabi.
"We get paid by liftings...either out of Ceyhan or out ofthe south...We certainly got more liftings in the last couple ofmonths." He did not give details of the liftings.
BP has also extended an agreement with Iraq's Ministry ofOil to help arrest declining production at the huge northernKirkuk oilfield, Townshend said. Kirkuk is currently disputedbetween the central government in Baghdad and Iraq's Kurdishregion.
"We had a letter of intent, which was for a year, and weextended that until the end of this year because there was atime last year where we couldn't do anything productive."
Under the deal, BP works on the Baghdad-administered side ofthe border with the Kurdish region, on the Baba and Avanageological formations. Kirkuk's third formation, Khurmala, iscontrolled by the Kurdistan regional government.
BP, along with other IOCs, is in talks with Baghdad overthe technical service agreements under which they develop Iraq'ssouthern fields. Investments in the fields are made by theforeign firms, which are then supposed to receive per-barrelfees.
But low oil prices have made this arrangement difficult forthe financially strapped Baghdad government. Iraq's financeminister told Reuters in March that Baghdad was planning tochange the way it operated exploration and production contractswith companies such as Royal Dutch Shell, BP and Exxon.
This may eventually move Iraq for the first time toproduction-sharing contracts, in which revenues are divided,from service contracts in which oil firms are paid a set fee.
Townshend said IOCs had presented the Ministry of Oil withsome proposed amendments to their contracts.
"They've asked for our ideas - they've asked all the IOCsfor ideas," he said, declining to comment on whether theministry had responded. (Reporting by Rania El Gamal and Maha El Dahan; Editing byAndrew Torchia)
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