When independent oil and gas producers based in the semi-autonomous Kurdistan Region of Iraq (KRI) turned to the bond market between 2007 and 2015, fixed-income investors welcomed the opportunity to gain exposure to vast untapped reserves. But the honeymoon didn’t last – by 2016, three of the five bond issuers with operations in the region had renegotiated their debts.
These companies were battered by the commodity price collapse, with the oil proving neither as plentiful nor accessible as once thought, and the Kurdistan government’s struggle to make payments while funding a war against ISIS. The region’s ability to generate revenues was further hit when the main export pipeline running from Kirkuk to Ceyhan in Turkey was closed for a short-period in early-2016 following militant attacks.
With ISIS on the back foot and payments for oil being made more regularly, could it be time to reassess these credits?
This special report summarises the key issues facing the region, before taking a closer look at the five bond issuers with operations in the region: Dana Gas, DNO, Genel, Gulf Keystone and ShaMaran.