Kurdish oil producers rally as Gulf Keystone receives payment

LONDON (Bloomberg) -- Oil producers operating in the Kurdish area of Iraq rallied Thursday after Gulf Keystone Petroleum Ltd. received its second payment from the regional government for crude exports.

The Kurdistan Regional Government paid Gulf Keystone $15 million for exports of crude from Shaikan field this month, the company said in a statement Thursday. Its shares advanced as much as 13%, while fellow producers in the region DNO ASA and Genel Energy Plc gained as much as 9.8% and 8.6%, respectively.

“This October 2015 payment follows a similar payment in September,” Gulf Keystone said. It’s in line with pledges from the KRG to resume regular compensation to international oil companies for exports from the region, it said.

Oil producers in the semi-autonomous region are receiving the first scheduled compensation this year after getting caught in a dispute over revenue sharing between authorities in the northern Kurdish enclave and Iraq’s federal government. Even after the two administrations made an agreement to resolve the standoff in December, payments continued to elude producers after the collapse in prices squeezed KRG budgets. Crude exports are the main source of revenue for government salaries and services in the region, which is also financing a war against Islamic State militants.

Genel Energy declined to comment on whether it had received another payment from the KRG. DNO didn’t immediately respond to a request for comment.

Shares of Gulf Keystone rose 8.6% to 31.5 pence at 8:33 a.m. in London. DNO added 8.5% to 9.73 Norwegian kroner and Genel gained 7.7% to 369.50 pence.