The KRG’s success in boosting crude output in recent months is being eroded by sky-high paybacks to crude offtakers crippling its ability to pay IOCs.

The financial woes of Iraq’s Kurdistan Regional Government (KRG) continued in November as a mixture of lower oil prices and prepayment debt obligations caused revenues to sink. This more than offset sizeable increases in production and sales, with the $375mn net amount received by the KRG after payment obligations way below the...