Exclusive: Iraq Builds Up Arrears to Majors as Oil Price Drops - Sources

Mar 11, 2015 | Dmitry Zhdannikov and Alex Lawler, Reuters
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Iraq is building up debts to the oil companies developing its giant fields, industry sources said, a further sign of how the oil-price drop is putting a squeeze on revenues in OPEC's second-largest producer.

Western oil companies including Royal Dutch Shell, BP and Exxon Mobil are working at Iraq's southern oilfields under service contracts, which are currently based on a fixed dollar fee for additional volumes produced.

As a result of the halving of oil prices to around $56 a barrel from $115 in June, the amount of crude needed to pay the companies has roughly doubled - reducing revenue to a government fighting an Islamic State insurgency.