ERBIL, Kurdistan Region of Iraq - Iraqi Prime Minister Mohammed Shia’ al-Sudani on Thursday announced reaching “a historic agreement” that will see Baghdad receive crude oil produced from the fields of the Kurdistan Region and export it through Turkey’s Ceyhan pipeline.

“Today we reached a historic agreement under which the Federal Ministry of Oil will receive crude oil produced from the fields in the Kurdistan Region of Iraq and export it through the Iraq–Turkey pipeline,” the Iraqi premier wrote in a post on X.

The Iraqi oil ministry confirmed the agreement, under which the Kurdistan Region will deliver “all crude oil” produced from its fields to the State Organization for Marketing of Oil (SOMO), apart from the quantities allocated for domestic use, which will later be exported through the Iraq-Turkey pipeline.

“This agreement is the result of intensive efforts and ongoing discussions over the past months, stemming from a shared national vision aimed at strengthening Iraq's role as a major player in the global energy market, preserving Iraq's sovereignty, and rigorously defending its national interests and the rights of all Iraqis,” read the statement from the ministry.

The ministry added that the agreement also establishes “clear technical and regulatory mechanisms to ensure smooth export flows and transparency in oil revenues.”

Following the announcement of the agreement, the Kurdistan Region's natural resources ministry said in a statement that oil exports are set to resume within the next 48 hours.

The Kurdistan Region’s oil exports through Turkey’s Ceyhan pipeline have been halted since March 2023. Erbil and Baghdad have since announced several agreements to resume exports, but the process had been blocked due to 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.

A group of oil companies operating in the Kurdistan Region on Wednesday announced reaching “interim agreements” with Erbil and Baghdad to resume the Region’s oil exports, saying once the “milestone” deal is signed and implemented, it “should allow exports to restart in the coming days.”

Sudani hailed the agreement as “an achievement 18 years in the making,” noting that “this ensures fair distribution of wealth, diversification of export outlets, and encouragement of investment.”

International oil companies (IOCs) operating in the Kurdistan Region have production-sharing contracts (PSCs) with the Erbil government, under which the oil firms pay the entire cost of production while the Kurdistan Regional Government (KRG) receives the majority of the profits.

Baghdad deems PSCs to be in violation of the Iraqi constitution and has requested they be amended; a request that the IOCs have rejected, calling for the honoring of the agreements in place.

In their Wednesday statement, the oil firms stated that “the agreed framework maintains the sanctity of existing contracts and provides surety of payment to IOCs.”

The halt in Kurdish oil exports came after Ankara lost a case against Baghdad in a Paris-based arbitration court, in which Iraq accused Turkey of breaching a 1973 agreement by allowing the Erbil to start selling oil independently of Baghdad in 2014.