Iraq paying off foreign oil companies

Country's Oil Minister says that 2014 arrears have been paid

Iraq owes billions of dollars to oil firms.
Iraq owes billions of dollars to oil firms.

Iraq has paid foreign oil companies $9bn in remaining arrears for 2014 and was paying outstanding fees for 2015 in stages until the beginning of next year, Reuters has reported. 

The news agency said that Oil Minister Adel Abdel Mehdi wrote in the al-Adala newspaper that the ministry would study with foreign oil companies ways to reduce costs and link them to oil prices.

International oil companies including BP, Royal Dutch Shell, ExxonMobil, Eni and Lukoiln operate in Iraq's southern oilfields under service contracts, whereby they are paid a fixed dollar fee for production.

This means that with the drop in oil prices over the past year, the amount of crude needed to pay the companies has roughly doubled, the report said.

Abdel Mehdi added that the OPEC member's southern crude oil exports would exceed 2.75mn barrels per day (bpd) through the end of 2015, which is the estimated volumes for this year's budget.  

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