By Peg Mackey
LONDON, Oct 8 (Reuters) - Iraqi Kurdistan's leading oilproducer, Genel Energy , said it would keep crudeexports flowing after the Kurdistan Regional Government (KRG)finally received an initial payment from Baghdad.
The central government and the autonomous region agreed lastmonth to settle a dispute over oil payments after the KRGpromised to continue exports and Baghdad pledged to pay foreigncompanies working there.
Iraq's finance ministry issued an initial payment early lastweek, but the funds had not landed in the KRG account by Friday,prompting Genel to say it would halt exports if the money didnot arrive soon.
On Monday, the first installment of 650 billion Iraqi dinars($558.9 million) was received, a KRG spokesman said.
"We won't cut exports now," Genel Energy President MehmetSepil told Reuters. "The KRG will reconcile (the payments) withall the contractors, and then we will get paid."
The KRG spokesman said the northern region expected a secondpayment of 350 billion Iraqi dinars to arrive imminently.
"We trust there will not be the same delays with the secondtranche," he said.
Exports from Kurdistan have risen to 170,000 barrels per day(bpd), and the fields of Taq Taq and Tawke, where London-listedexplorer Genel Energy has a stake, are contributing about110,000 bpd.
In April, the KRG halted oil shipments in protest over whatit said were overdue payments from the central government tocompanies in the Kurdish region.
It later resumed exports through a Baghdad-controlledpipeline from Kirkuk to the Turkish port of Ceyhan butthreatened to cut them off again if no agreement was reached onpayment.
Iraqi Deputy Prime Minister Rosh Nuri al-Shawish said onTuesday the Finance Ministry had issued an initial payment tothe KRG.
Genel has complained it has not been paid for most of the oilexported in 2009 and 2011. Other operators, including Norway'sDNO , have voiced similar grievances.
Taq Taq and Tawke form the backbone of KRG exports, and Sepilsaid deliveries from Taq Taq alone could be ramped up to around95,000 bpd.
Deliveries from Tawke could climb to 90,000 bpd, industrysources said. Khurmala, the northernmost part of the giantKirkuk oilfield, makes up the remainder of exports.
Kurdistan has angered Baghdad by signing deals with foreignoil majors, such as Exxon and Chevron , which thecentral government rejects as illegal.
The oil contracts row is part of a broader battle between theBaghdad government and Kurdistan over oil rights, territory andregional autonomy, which is straining Iraq's uneasy federalunion.
($1 = 1163.0000 Iraqi dinars)(editing by Jane Baird)
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Keywords: IRAQ OIL/PAYMENT