ERBIL, Kurdistan Region of Iraq - Kurdistan Region Prime Minister Masrour Barzani on Saturday stated that the Iraqi federal government and International Oil Companies (IOC) operating in the Region have an understanding that could lead to the resumption of Kurdish oil exports.

During the opening ceremony of the Sheikhan–Lalish road project in Duhok, the premier said that “between the companies that produce oil in the Kurdistan Region and the federal government, there seems to be an understanding and agreement,” adding that this is “a very good initiative to eliminate the challenges and obstacles that remain till now.”

“I hope in the upcoming days this agreement becomes a reality… and for the Iraqi government to fulfill its commitment to the rights of Kurdistan’s residents,” continued Barzani.

Baghdad and Erbil announced in late February that they reached an agreement to resume the Kurdistan Region’s oil exports, but the process has yet to restart, with international oil producers demanding payment surety, transparent implementation of Iraq’s budget law stipulations, and resolution of payments that are in arrears before resuming the work.

The export of Kurdish oil through Turkey’s Ceyhan pipeline was suspended in March 2023. The halt has dealt a major blow to Iraq and the Kurdistan Region, with over 30 billion dollars in lost revenue to date.

Barzani also stated that Erbil continues discussions with Baghdad over salary and budget disputes, reiterating that the Kurdistan Region has fulfilled all its commitment and “no obstacles have ever been created” from Erbil’s side in this regard.

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 Erbil and Baghdad.

An agreement was reached in July between the two governments, whereby the Kurdistan Region agreed to export 230,000 barrels of oil through the federal government's State Organization for Marketing of Oil (SOMO), in addition to paying 120 billion Iraqi dinars in non-oil revenues to Baghdad as its share of the federal treasury, in exchange for salaries.

Civil servants in the Kurdistan Region received their salaries for June in September, while July and August salaries have yet to be disbursed by the Iraqi government. 

Reporting by Hevi Karam