Korean builders face risk of losing $755 mil. in unpaid Iraq refinery project

Hyundai Engineering & Construction, GS Engineering & Construction, SK ecoplant and Hyundai Engineering risk losing 1.04 trillion won tied to the Karbala Refinery Project in Iraq after the Iraqi client withheld payments and the companies faced possible forfeiture of performance guarantees. The builders handed over the refinery in December 2023, but negotiations over the outstanding amounts have stalled. The companies say limited cooperation from Iraqi authorities has hindered repairs to reported defects, while Iraq has suggested payment in crude oil.

The unpaid balance comprises 209.3 billion won withheld over alleged defects and related issues, 277.7 billion won in tax-related payments and 138.4 billion won for operations and maintenance.

The refinery was designed to process 140,000 barrels of crude oil per day, and the project was commissioned by Iraq’s state-owned State Company for Oil Projects.

Of 162 reported defects, 120 cannot be addressed until the refinery is shut down or the causes are determined.

The Iraqi side agreed in April last year to pay about 33.5 billion won in outstanding operations and maintenance fees, but the payment has not been made.

The Iraqi side rejected settlement terms proposed by the South Korean companies in September, after negotiations that began in May were disrupted by changes in Iraq’s oil ministry and the arrest of a deputy minister.

Published Oct 23, 2026 7:57 pm KST

Hyundai Engineering & Construction (E&C) headquarters in Seoul / Courtesy of Hyundai E&C

Hyundai Engineering & Construction (E&C) and three other local builders are at risk of losing more than 1 trillion won ($755 million) tied up in a major Iraqi refinery project, according to documents obtained by a ruling party lawmaker Friday.

Hyundai E&C, GS Engineering & Construction, SK ecoplant and Hyundai Engineering have yet to collect 625.4 billion won in outstanding payments and are facing the possible forfeiture of another 420.2 billion won in performance guarantees. The builders have been seeking payment for work on the $6.8 billion Karbala Refinery Project, commissioned by Iraq's state-owned State Company for Oil Projects (SCOP).

Company materials provided to Rep. Lee Jae-gang of the ruling Democratic Party of Korea showed the construction of a refinery capable of processing 140,000 barrels of crude oil per day was delayed by factors including Iraq’s internal conflict and the COVID-19 pandemic. The companies handed over the refinery's facilities to the Iraqi side in December 2023.

However, SCOP has withheld payments, citing outstanding defects and missing tax-related documentation. The unpaid amount includes 209.3 billion won withheld for alleged defects and related issues, 277.7 billion won in tax-related payments and 138.4 billion won for refinery operations and maintenance. The Iraqi firm had agreed in April last year to pay about 33.5 billion won of the outstanding operations and maintenance fees, but the payment has yet to be made.

The Korean companies are also facing the possible forfeiture of 420.2 billion won in performance guarantees submitted to ensure they fulfilled their contractual obligations, pushing up the total sum to 1.04 trillion won.

The two sides began negotiations in May to settle the outstanding payments, but the talks were effectively reset following a change in Iraq's oil minister and the arrest of a deputy minister.

In September, the Iraqi side rejected settlement terms proposed by the South Korean companies. The builders are preparing plans to address the reported defects, but progress has been hampered by limited cooperation from Iraqi authorities on site access permits, visas for essential personnel and the scheduling of refinery shutdowns needed to carry out repairs.

Of the 162 reported defects, 120 cannot be addressed until the refinery is shut down or the causes of the problems have been determined.

The Iraqi government has recently suggested that the companies accept crude oil instead of cash as payment for the outstanding amounts. In the past, some Korean builders had recovered part of their payments through a subsidiary in the oil sector that took delivery of and sold crude. However, companies without facilities to store or sell crude oil would find it difficult to use the same arrangement.

The lawmaker called on the Korean government to intervene in the dispute.

“The Iraqi side changes its position whenever ministries or officials change, while our companies are left fighting on their own. It is time for the government to get involved to help them.” Lee said. “I will urge the relevant government agencies to establish a coordinated, interagency support mechanism for recovering the unpaid payments during the National Assembly audit of the Ministry of Foreign Affairs on Monday."

现代工程建设公司、GS工程建设公司、SK ecoplant公司和现代工程公司可能因伊拉克客户拖欠款项而损失1.04万亿韩元，这些款项与伊拉克卡尔巴拉炼油厂项目相关，且相关公司可能面临履约保证金失效的风险。这些承建商已于2023年12月交付炼油厂，但关于未付款项的谈判陷入僵局。这些公司表示，伊拉克当局的配合不足阻碍了已报告缺陷的修复工作，而伊拉克方面则建议以原油支付款项。

未付余额包括因所谓缺陷及相关问题而被扣留的 2093 亿韩元、与税收相关的款项 2777 亿韩元以及运营和维护费用 1384 亿韩元。

该炼油厂设计日处理原油14万桶，该项目由伊拉克国有石油项目公司委托建设。

在报告的 162 项缺陷中，有 120 项缺陷只有在炼油厂停产或确定原因后才能解决。

伊拉克方面去年4月同意支付约335亿韩元的未付运营和维护费用，但至今尚未支付。

伊拉克方面在9月份拒绝了韩国公司提出的和解条款。此前，由于伊拉克石油部人事变动和一名副部长被捕，5月份开始的谈判陷入僵局。

发布于2026年10月23日晚上7:57（韩国标准时间）

现代工程建设（E&C）首尔总部 / 图片由现代工程建设提供

据执政党议员周五获得的文件显示，现代工程建设公司（E&C）和其他三家当地建筑商面临损失超过 1 万亿韩元（7.55 亿美元）的风险，这些资金投入到一个大型伊拉克炼油厂项目中。

现代工程建设公司、GS工程建设公司、SK ecoplant公司和现代工程公司尚未收到6254亿韩元的欠款，并可能面临4202亿韩元履约保证金被没收的风险。这些承建商一直在追讨伊拉克国有石油项目公司（SCOP）委托建设的价值68亿美元的卡尔巴拉炼油厂项目的款项。

公司向韩国执政党共同民主党议员李在刚提供的资料显示，一座日处理能力为14万桶原油的炼油厂的建设因伊拉克内部冲突和新冠疫情等因素而延误。这些公司于2023年12月将炼油厂设施移交给伊拉克方面。

然而，SCOP公司以存在未解决的缺陷和缺少税务相关文件为由，拒绝支付款项。未付款项包括因所谓缺陷及相关问题而被扣留的2093亿韩元、2777亿韩元的税款以及1384亿韩元的炼油厂运营和维护费用。这家伊拉克公司去年4月曾同意支付约335亿韩元的未付运营和维护费用，但至今仍未支付。

韩国企业还可能面临没收 4202 亿韩元履约保证金的风险，这些保证金是为了确保他们履行合同义务而提交的，这将使总金额上升至 1.04 万亿韩元。

双方于 5 月开始就未结款项进行谈判，但由于伊拉克石油部长更换和一名副部长被捕，谈判实际上被搁置了。

9月份，伊拉克方面拒绝了韩国公司提出的和解方案。承建方正在制定计划以解决已报告的缺陷，但由于伊拉克当局在现场准入许可、关键人员签证以及炼油厂维修所需停工安排等方面的配合有限，进展受阻。

在报告的 162 项缺陷中，有 120 项缺陷只有在炼油厂停产或确定问题原因后才能解决。

伊拉克政府近期建议各公司接受原油而非现金作为未付账款的支付方式。过去，一些韩国建筑商曾通过其石油子公司收回部分款项，该子公司负责接收和销售原油。然而，对于没有原油储存或销售设施的公司而言，采用同样的安排则较为困难。

该议员呼吁韩国政府介入这场争端。

李说：“伊拉克方面立场瞬息万变，每当政府部门或官员更迭，我们的公司就只能孤军奋战。现在是政府介入帮助他们的时候了。”他还表示：“我将敦促相关政府机构在周一国民议会审计外交部期间，建立一个协调一致的跨部门支持机制，以追回拖欠款项。”