The Kurdistan Regional Government (KRG) has halted oil exports from April 1 after claiming that the central government in Baghdad had not made payments to companies working in Northern Iraq since May 2011
In a statement, the Ministry of Natural Resources (MNR) said, "After consultation with the producing companies, the Ministry has reluctantly decided to halt exports until further notice. There have been no payments for 10 months, nor any indication from federal authorities that payments are forthcoming."
The ministry added that production would be diverted to the local market for processing and refining to generate an alternative source of cash flow for the producing companies.
"Once this non-payment situation has been resolved we will do our utmost to increase exports above the target of 175,000 bpd included in the 2012 Iraq budget," added the MNR.
In a follow-up statement, DNO International said that it had been instructed by the KRG to halt delivery of the crude oil produced from the Tawke oil field and destined for the Iraqi national pipeline system, for eventual export through Turkey.
