Spending cut planned for Kurdish oil operations

The bulk of spending for 2015 will target oil operations in northern Iraq and, while spending is reduced, output should be static, Oryx Petroleum announced.

Oryx, a Canadian company focused on operations in the Kurdish north of Iraq, said it was planning 2015 capital spending of $140 million, a 60 percent reduction from the budget set in November.

Oryx Chief Executive Officer Michael Ebsary said low oil prices and "disruptions to market access" in the semiautonomous region led in part to the spending revision.

"Accordingly, we have moderated our capital expenditure plans to focus on our core development assets to enable us to achieve our targeted near term production growth," he said in a statement. "We are also reducing costs throughout the organization in order to increase our overall efficiency."

The company in June sold its first volumes of crude oil from the Demir Dagh reserve area to the domestic market. The rise of the self-proclaimed Islamic State last year curtailed operations in northern Iraq when several oil companies operating in the region evacuated non-essential staff as a security precaution.

Oil work is continuing in the northern Kurdish region of Iraq as military pressure pushes back the insurgency waged by the Islamic State. Despite its oil wealth, however, the World Bank said the Kurdish region needs at least $1.4 billion to stabilize the economy in 2015.

Nearly all of the spending for Oryx will target the Hawler license area in Kurdish Iraq, with about 35 percent designated for linking up to an export pipeline through Turkey. Total production is expected at around 40,000 barrels per day, which is unchanged from the previous guidance.