The beleaguered oil companies operating in Kurdistan have entered déjà vu season.
One year after crude flows restarted, thanks to the resolution of a dispute between Baghdad and the regional government in northern Iraq, Kurdistan has ordered its oil companies to halt exports again.
The Kurdish oil ministry said companies are not being paid for their oil, which is exported through a shared Iraqi pipeline to Turkey. The same issue led Kurdistan to halt exports in October 2009; exports restarted in February last year only after a compromise between the Kurdistan Regional Government and the central government in Baghdad.
"There have been no payments for 10 months, nor any indication from federal authorities that payments are forthcoming," Kurdistan's ministry of natural resources said this week.
"We hope that this is a temporary measure and that those in the federal government responsible for non-payment will quickly realise that their failure to adhere to their agreements is not in the interests of the Iraqi people."
Although the volume of exports from Kurdistan is small change in the context of overall Iraqi exports - 175,000 barrels per day (bpd) compared with the rest of Iraq's 2.3 million bpd - the relatively safe and until recently undrilled Kurdish region is regarded as one of the world's most promising sites for exploration. The halt to exports means that foreign operators in Kurdistan will have to sell all their oil on the local market.
Yesterday the share prices of Kurdistan's independent producers declined. Norway's DNO dropped 2.5 per cent by midday to 9.85 Norwegian krone. Genel Energy, of Turkey and the United Kingdom, fell by 1.9 per cent to 727.5 pence. Gulf Keystone, listed in the UK, declined by 1.8 per cent to 257.5 pence.
DNO, which is 40 per cent owned by RAK Petroleum, said its projects would continue as before.
"All other Tawke crude oil and refined product deliveries and field operations remains unaffected," DNO said on the day of the announcement. "All exploration and development operations on wells … continue as before and as per plan."