Tripartite agreement to resume Kurdistan’s oil exports unprecedented: Iraqi FM
NEW YORK - The latest agreement between Baghdad, Erbil, and international oil companies (IOCs) signed on Monday to resume Kurdish oil exports is “very different” from any previous deals and could pave the way to resolve budget disputes between the federal and regional governments, Iraqi Foreign Minister Fuad Hussein said.
“There hasn't been an agreement like this [before]. It is a very different agreement,” Hussein told Rudaw on the sidelines of the United Nations General Assembly on Monday, noting that the deal involved both the Kurdish and federal governments as well as IOCs. “So far, there has been no such agreement.”
Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been halted since March 2023, when a Paris-based arbitration court ruled in favor of Baghdad, saying Ankara violated a 1973 pipeline agreement by allowing Erbil to independently export oil starting in 2014.
On Monday, the Iraqi government, the Kurdistan Regional Government (KRG), and oil companies signed a tripartite deal to restart exports. An informed source told Rudaw English that under the agreement, companies operating in the Kurdistan Region will receive crude oil instead of cash as part of their entitlements. Exports are expected to resume within days.
“Honestly, this is an important agreement; it wasn't easy [to reach],” Hussein said.
The suspension of oil exports last year triggered a budget crisis. Tensions escalated in May when Baghdad froze transfers to the KRG, accusing it of exceeding its 12.67 percent share and failing to honor export commitments. The move affected salaries of more than 1.2 million public employees in the Region.
“Now that oil has been delivered and the salary issue should easily be resolved,” the Iraqi foreign minister said.
The deadlock began to ease last month when Erbil and Baghdad reached a deal committing the KRG to export its entire output - about 230,000 barrels per day - through Iraq’s State Oil Marketing Organization (SOMO).
The following is the full transcript of the interview with Fuad Hussein:
Rudaw: Let us begin with the agreement recently signed between Baghdad and Erbil. Will the Kurdistan Region’s oil exports resume soon?
Fuad Hussein: Yes, the agreement, regarding the handover of oil to the SOMO company, based on what I have understood, before I arrived [in New York], as I have been in contact with our people in the [Kurdistan] Region, currently oil production [in the Region] is 230,000 [oil] barrels [per day]. From this amount, 50,000 is allocated for domestic consumption. The rest is handed over to the SOMO company for export.
Honestly, this is an important agreement; it wasn't easy [to reach]. The oil companies operating in the Kurdistan Region held lengthy discussions with the federal government and the Region. The Iraqi and the Region reached an agreement on this issue, but a problem arose because the companies demanded a tripartite agreement. In conclusion, in recent days, they reached this conclusion, and all three sides signed it.
What hope is there that this agreement will be different from previous agreements?
No, there hasn't been an agreement like this [before]. It is a very different agreement. This is an agreement between the Region and Baghdad, as well as the Region, Baghdad, and the [oil] companies. No, this is a new agreement, and so far, there has been no such agreement.
What impact will this agreement have on other issues between Erbil and Baghdad?
The impact is that in Baghdad, the oil issue was linked to the salary issue, and it was also linked to the budget law. Not just now, but also in previous years, the oil delivery issue was tied to the budget [issue]. Now that oil has been delivered and the salary issue should easily be resolved. There is the issue of non-oil revenues. I think that will be solved too.
Has the salary issue been solved now?
The salary issue is a fundamental one that has been the core of the problems. For sending salaries, those have been solved. This means that the salary [issue] will be solved.
About your visit to the United Nations General Assembly, what is an important issue for Iraq to put forward this year?
The situation in the region and the world is in danger – especially, the situation in the region is in danger. Besides the Palestine issue, which is a core issue, the situation in the region in general is in danger. A short while ago, Israel attacked Qatar. This has not happened [before]. Qatar is an ally nation of the West, an ally of the United States and an ally of Israel in reality. And Qatar was mediating between Hamas, Israel and America to solve the problem. Yet, it was attacked.
There are threats too, there are threats from Israel to attack Iran. It means that the entire region is under threat. Where is this going? We do not know. This time, the meetings that are held here, especially in regard to the Middle East, are all about this issue. It is about how the situation in Gaza can change, how the situation between the Palestinians and Israel can improve or calm down, and where the situation will head in general. Towards peace or conflict?
When Israel attacked Qatar, how did Iraqi leaders view this?
Of course, the attack was formally condemned. We participated in the Arab-Islamic emergency summit in Qatar, the prime minister [Mohammed Shia’ al-Sudani] and I were there. It is clear that the attack was condemned. But in reality, for you to attack a nation that is your ally, a nation that is mediating to establish peace, it is dangerous. The region is in danger, the region. I am saying the region, and Iraq is part of the region.
What is the Iraqi president going to emphasize in his address? Are you aware of the content of his speech?
Yes, I am aware. But let us wait for him to read his speech.
How hopeful are you that Syria's future will be good?
Syria's future is related to the entire region. There are two aspects: First, Syria's internal issues must be resolved, and a process must be created in which all components participate. Second, it concerns the entire region.
“There hasn't been an agreement like this [before]. It is a very different agreement,” Hussein told Rudaw on the sidelines of the United Nations General Assembly on Monday, noting that the deal involved both the Kurdish and federal governments as well as IOCs. “So far, there has been no such agreement.”
Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been halted since March 2023, when a Paris-based arbitration court ruled in favor of Baghdad, saying Ankara violated a 1973 pipeline agreement by allowing Erbil to independently export oil starting in 2014.
On Monday, the Iraqi government, the Kurdistan Regional Government (KRG), and oil companies signed a tripartite deal to restart exports. An informed source told Rudaw English that under the agreement, companies operating in the Kurdistan Region will receive crude oil instead of cash as part of their entitlements. Exports are expected to resume within days.
“Honestly, this is an important agreement; it wasn't easy [to reach],” Hussein said.
The suspension of oil exports last year triggered a budget crisis. Tensions escalated in May when Baghdad froze transfers to the KRG, accusing it of exceeding its 12.67 percent share and failing to honor export commitments. The move affected salaries of more than 1.2 million public employees in the Region.
“Now that oil has been delivered and the salary issue should easily be resolved,” the Iraqi foreign minister said.
The deadlock began to ease last month when Erbil and Baghdad reached a deal committing the KRG to export its entire output - about 230,000 barrels per day - through Iraq’s State Oil Marketing Organization (SOMO).
The following is the full transcript of the interview with Fuad Hussein:
Rudaw: Let us begin with the agreement recently signed between Baghdad and Erbil. Will the Kurdistan Region’s oil exports resume soon?
Fuad Hussein: Yes, the agreement, regarding the handover of oil to the SOMO company, based on what I have understood, before I arrived [in New York], as I have been in contact with our people in the [Kurdistan] Region, currently oil production [in the Region] is 230,000 [oil] barrels [per day]. From this amount, 50,000 is allocated for domestic consumption. The rest is handed over to the SOMO company for export.
Honestly, this is an important agreement; it wasn't easy [to reach]. The oil companies operating in the Kurdistan Region held lengthy discussions with the federal government and the Region. The Iraqi and the Region reached an agreement on this issue, but a problem arose because the companies demanded a tripartite agreement. In conclusion, in recent days, they reached this conclusion, and all three sides signed it.
What hope is there that this agreement will be different from previous agreements?
No, there hasn't been an agreement like this [before]. It is a very different agreement. This is an agreement between the Region and Baghdad, as well as the Region, Baghdad, and the [oil] companies. No, this is a new agreement, and so far, there has been no such agreement.
What impact will this agreement have on other issues between Erbil and Baghdad?
The impact is that in Baghdad, the oil issue was linked to the salary issue, and it was also linked to the budget law. Not just now, but also in previous years, the oil delivery issue was tied to the budget [issue]. Now that oil has been delivered and the salary issue should easily be resolved. There is the issue of non-oil revenues. I think that will be solved too.
Has the salary issue been solved now?
The salary issue is a fundamental one that has been the core of the problems. For sending salaries, those have been solved. This means that the salary [issue] will be solved.
About your visit to the United Nations General Assembly, what is an important issue for Iraq to put forward this year?
The situation in the region and the world is in danger – especially, the situation in the region is in danger. Besides the Palestine issue, which is a core issue, the situation in the region in general is in danger. A short while ago, Israel attacked Qatar. This has not happened [before]. Qatar is an ally nation of the West, an ally of the United States and an ally of Israel in reality. And Qatar was mediating between Hamas, Israel and America to solve the problem. Yet, it was attacked.
There are threats too, there are threats from Israel to attack Iran. It means that the entire region is under threat. Where is this going? We do not know. This time, the meetings that are held here, especially in regard to the Middle East, are all about this issue. It is about how the situation in Gaza can change, how the situation between the Palestinians and Israel can improve or calm down, and where the situation will head in general. Towards peace or conflict?
When Israel attacked Qatar, how did Iraqi leaders view this?
Of course, the attack was formally condemned. We participated in the Arab-Islamic emergency summit in Qatar, the prime minister [Mohammed Shia’ al-Sudani] and I were there. It is clear that the attack was condemned. But in reality, for you to attack a nation that is your ally, a nation that is mediating to establish peace, it is dangerous. The region is in danger, the region. I am saying the region, and Iraq is part of the region.
What is the Iraqi president going to emphasize in his address? Are you aware of the content of his speech?
Yes, I am aware. But let us wait for him to read his speech.
How hopeful are you that Syria's future will be good?
Syria's future is related to the entire region. There are two aspects: First, Syria's internal issues must be resolved, and a process must be created in which all components participate. Second, it concerns the entire region.