Market Report: Cash-strapped Kurdistan scrambles to meet payment deadline for oil exports

The KRG began making what were supposed to be monthly payments to foreign oil firms in September

Shares in the London-listed, Kurdistan-focussed oil firms came under pressure yesterday as the cash-strapped region scrambled to meet the payment deadline for oil exports.

The Kurdistan Regional Government (KRG), which governs Iraq’s autonomous region, is funding the fight against Isis with oil exports.

However, the costs of the war are escalating and its currency – the oil price – continues to drift lower, hampering its ability to pay foreign companies including Genel Energy, run by Glencore chairman Tony Hayward, and Gulf Keystone Petroleum.

The KRG began making what were supposed to be monthly payments to foreign oil firms in September, but these firms are now owed hundreds of millions of dollars by the KRG. Investors began to fear yesterday that the government would miss the deadline to pay the companies for November, which dragged shares in Gulf Keystone down as much as 10 per cent at one point yesterday.

But an emailed statement from the KRG later in the day claimed to have authorised the payments, helping Gulf Keystone rally to finish just 0.25p lower at 21.5p, with Genel 7p cheaper at 246.75p.

Stocks began a busy week for economic data in a stupor as the FTSE 100 fell 19.06 points to 6,356.09.

On Thursday, European Central Bank President Mario Draghi will reveal whether the bank will extend its quantitative easing programme, the day before the last jobs figures from the US before the hotly-anticipated decision on whether to raise interest rates for the first time since 2006.

A commodity price rally buoyed mining stocks after spending much of the day in the red, as Glencore ended up 4.83p at 96.71p and Anglo American gained 8.5p at 408.65p.

Morrisons tumbled 2.1p to 152.5p with the embattled supermarket group set to be axed next month from the FTSE 100 in tomorrow’s reshuffle.

Barring a surge today, it will drop out of the top flight, along with security firm G4S, 3.5p better off at 226.9p, and engineering group Meggitt, 0.7p higher at 387.7p, meaning the trio will no longer be included in Footsie tracker funds.