Kurdish government delivers boost for oil firms operating in Iraqi Kurdistan

The Kurdistan Regional Government has provided a boost for oil companies operating in the region by providing clarity on when payments for crude exports can be expected.

From September, the semi-autonomous state will allocate "a portion of the revenue" from its crude oil sales to international oil companies on a monthly basis.

Firms that operate in the region, such as Genel Energy and Gulf Keystone, will also receive additional revenue as oil exports increase, Kurdistan's Ministry of Natural Resources said in a statement.

Despite a deal struck with Baghdad earlier this year that permitted the KRG to export oil in exchange for payments from the Iraqi capital, it has been unable to properly pay oil companies operating in the region since May 2014.

The bulk of KRG's resources have instead been used to fund government salaries, maintain public services and pay the Peshmerga and other security forces in their battle against Islamic State.

However, increasing oil revenue means that there is now enough cash in the coffers to begin regular payments to energy firms.

The Kurdish government lauded the patience demonstrated by oil companies and the fact that they have helped raise exports to record levels.

It said: "They have demonstrated their commitment to the people of Kurdistan at a time when the Region has been fighting terrorism, enduring a budget shortfall from the federal government in Baghdad, and shouldering the social, political and economic burden of an influx of 1.8 million refugees and internally displaced people."

Shares in both Genel Energy and Gulf Keystone were buoyed by the news.