ERBIL, Kurdistan Region of Iraq – The Kurdistan Regional Government (KRG) on Wednesday stressed its willingness to hand over all of its produced oil to Baghdad until a trilateral agreement to resume exports is signed with the international oil companies (IOCs), which is expected to happen by “the end of this week.”

Prospects for a solution between Erbil and Baghdad were renewed after the Iraqi Council of Ministers on Tuesday approved a proposal from the KRG to resume Kurdistan Region oil exports through the country’s State Organization for Marketing of Oil (SOMO).

“According to this new understanding… all of the [Kurdistan] Region’s produced oil will be handed over to SOMO (apart from the amount for local consumption), and this stage is contingent on the signing of a trilateral agreement to export oil, but the discussions have progressed well, and the agreement is expected to be signed by the end of this week,” read a statement from the KRG released after its regular cabinet meeting on Wednesday.

Oil exports from the Kurdistan Region and the issue of the federal treasury’s share of the Region’s domestic revenues have underpinned a longstanding budgetary dispute between the two governments.

The cabinet also discussed the latest developments in the talks between the negotiating delegations from Erbil and Baghdad over the issue of the Kurdistan Region’s local revenues. The KRG Council of Ministers called for the swift disbursement of the Region’s civil servant salaries for the months of July and August “in light of the recent developments.”

During the meeting, Kurdistan Region Prime Minister Masrour Barzani reiterated that Erbil “has fulfilled all its constitutional obligations and shown all flexibility to eliminate all the problems and technical obstacles that have been used as an excuse for not sending salaries,” according to the statement.

Iraq’s State Council on Wednesday postponed its ruling on the issue of non-oil revenues in the Kurdistan Region after failing to reach a consensus. The Kurdistan Region’s two representatives did not attend Wednesday’s meeting, according to The New Region's Baghdad correspondent. Their absence means any council decision would not be binding on the KRG, allowing Erbil the option of referring the matter to the Federal Supreme Court if needed.

The postponement of the State Council's ruling on the handover of non-oil revenues suggests that the timeline for reaching a comprehensive agreement will likely be delayed.