KRG nets $1.3 billion in oil sales for Q3 of 2018 - auditor

ERBIL, Kurdistan Region — As part of its continued energy sector audits, Deloitte announced on Wednesday that the Kurdistan Region Government (KRG) sold crude oil and condensate worth more than $2.26 billion in the third quarter of 2018 up from $1.84 billion in the previous quarter.

It had two findings.

"Oil export and consumption - We did not identify any misstatements in the 1 July 2018 to 30 September 2018 oil export and consumption data," stated Deloitte in their report.

The Kurdistan Region had a "gross value of crude oil and condensate sold (piped exports and local sales)" of $2,262,409,784 in the three-month period.

"Oil sales – We did not identify any misstatements in the 1 July 2018 to 30 September 2018 oil sales data and the net amount received in the period by the KRG," added Deloitte.

Because of payments to other companies, licensing agreements, repayment of debts, payments to oil producers, among other costs, the KRG netted more than $1.3 billion — $1,288,773,374 for sales and related activities, and $104,598,002 in additional advance payments made by buyers.

It averaged $63.098 per barrel of oil exported through the Ceyhan pipeline (totaling 35,246 851 barrels), and $67.734 for crude and condensate sold locally (totaling 174,761 barrels).

In the previous quarter, the KRG exported 30,190,384 barrels of oil through the pipeline. 

An advisor to KDP President Masoud Barzani explained that the audits help in improving Erbil-Baghdad relations.

"It's an important issue between Iraq and the KRG," Masoud Haider, a former MP in the Iraqi parliament, told Rudaw English. "We hope that in 2019, with an open discussion — all the issues, economic issues between the KRG and the federal government will be on the table and so on."

The audits are also a tool for the KRG when drafting contracts with foreign energy companies.

Deloitte was appointed to review the KRG's oil activities for 2014-2017 by the KRG's Regional Council for Oil and Gas Affairs.

The KRG welcomed the report.

"The Regional Council for Oil and Gas Affairs acknowledges the positive feedback received from stakeholders, including the international community, and reiterates its commitment to the people of Kurdistan that the two international audit firms, Deloitte and Ernst & Young, will continue to independently review the oil and gas sector, inclusive of all the streams," it stated.