The federal ministry said in a statement that it had resumed the payment of the Kurdistan Regional Government’s (KRG) public employees after Erbil’s commitment to the latest financial and oil agreement with Baghdad.
The ministry stated that the KRG has begun transferring its current oil production to Iraq’s State Oil Marketing Organization (SOMO) and will continue to do so until it reaches the 230,000 barrels per day (bpd) stipulated in the agreement. It also confirmed receiving 120 billion dinars from the KRG’s non-oil revenues, as earlier announced by the Kurdish government.
On Thursday, the KRG and the federal government finalized an agreement aimed at resolving their disputes over finances and Kurdish oil exports. However, officials from both sides have continued to accuse each other of creating obstacles to its implementation.
Under the agreement, the KRG must export its entire oil output through SOMO, keeping 50,000 barrels daily for local use. In return, Baghdad is expected to make budget transfers and provide refined fuel if needed. The KRG is also obligated to hand over 120 billion Iraqi dinars (nearly $92 million) in non-oil revenues monthly for May.
Fuad Hussein, Iraq’s Deputy Prime Minister and Foreign Minister, told Rudaw on Tuesday that Baghdad will continue paying the KRG civil servants for the months of June and July as well.
He added that Kurdish leaders and politicians have been in contact with him and worked tirelessly to make sure that the Region’s public employees are paid.
Kurdistan Region Prime Minister Masour Barzani said on Thursday that it is not possible for the KRG to hand over the required amount of oil to Baghdad due to damage caused to the oil field by recent drone attacks. Since the deal was announced, drone attacks on the Kurdistan Region appear to have ceased. Nearly 20 drone attacks were recorded in July, most targeting oil fields operated by international companies.
KRG has blamed Iraq’s Popular Mobilization Forces (PMF, or Hashd al-Shaabi) for the drone attacks, a charge Baghdad has denied.
Oil exports from the Kurdistan Region through the pipeline have been halted since March 2023 when a Paris-based arbitration court ruled in favor of Baghdad against Ankara, saying the latter had violated the 1973 pipeline agreement by allowing Erbil to begin exporting oil independently in 2014.
The KRG’s handover of its oil to SOMO is expected to effectively resume its exports to international markets.
However, the KRG, the Iraqi government, and international oil companies operating in the Kurdistan Region have yet to reach a final agreement on the future of Kurdish oil exports.
Updated at 1:57 pm