Iraq

Distressed debt funds will become big shareholders in troubled oil firm Gulf Keystone after bondholders agreed to swap $500 million of debt for equity, wiping out some of the world's top funds as shareholders, Reuters reported. Gulf Keystone operates the giant Shaikan oil field in Iraqi Kurdistan and produces about 40,000 barrels per day (bpd). The firm has been fighting to avoid insolvency after low oil prices and overdue oil export payments from the Kurdistan regional government crippled its balance sheet.

Oil producer Afren Plc said its board had decided to put the company into administration as it failed to secure support for a vital refinancing and restructuring plan, Reuters reported. Afren said earlier this month talks with bondholders, banks and its partners were scuppered after the company cut its production forecast for the year earlier this month. Its shares were suspended on the same day.

It is one of the cheapest places on earth to drill for oil — but also among the most dangerous. And, right now, Kurdistan’s intrepid band of western operators are sweating. Tumbling oil prices and a dispute over crude sales between war-torn Iraq’s federal government and the Kurdish administration have left three foreign operators — Genel Energy, Gulf Keystone Petroleum and DNO — owed hundreds of millions of dollars.

The Iraqi government has said it will close the state-owned Iraqi Airways after declaring it bankrupt, the BBC reported. Iraq's transportation ministry told reporters the airline would be closed following a damaging dispute with Kuwait over war reparations. Kuwait Airways says the Iraqi flag carrier owes it about $1.2bn for aircraft and plane parts taken during the Iraqi invasion of Kuwait in 1990. All scheduled Iraqi Airways flights have been cancelled.