The logo of Glencore is pictured in front of the company's headquarters in Baar, Switzerland, November 13, 2012. REUTERS/Michael Buholzer
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Glencore is seeking to raise $550 million from investors via a debt issue guaranteed by oil from Iraqi Kurdistan in an attempt to secure a big slice of the high-risk – and high-reward – market in a region at war with Daesh (ISIS). Kurdish oil has been targeted by European traders over the past two years, during an industry downturn, since Irbil began selling oil independently from Baghdad. The government of the autonomous Kurdish region in Irbil has borrowed around $2 billion from Glencore's rivals such as Vitol, Petraco and Trafigura to be repaid in oil. Six cargoes a month would represent a quarter of overall exports from Kurdistan and would be worth over $1.7 billion a year at today's price of around $40 per barrel for Kurdish oil, and more than $8 billion over the course of five years.Glencore says in its prospectus that, at today's oil prices, the value of oil that it would receive under its new five-year contract with Kurdistan will be over six times bigger than the $550 million debt issue.
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