ERBIL, Kurdistan Region of Iraq – Iraq’s state oil marketer on Friday announced the details of the recent tripartite agreement to resume exports from the Kurdistan Region’s oil fields, saying the first shipment is scheduled for Saturday morning, and adding that the deal will “establish long-term understandings.”

The Iraqi oil ministry on Thursday announced that an agreement has been reached between Erbil, Baghdad, and international oil companies (IOCs), whereby 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.

Ali Nizar al-Shatari, SOMO’s director general, said during a press conference on Friday that the agreement was reached through “direct negotiations” with international oil companies (IOCs) operating in the Kurdistan Region, adding that the deal includes “a strict mechanism” for paying the producers’ dues, in accordance with the Iraqi Federal Budget.

“The agreement stipulates that compensation will be $16 per barrel received by our company. We will deposit the amount, based on the global price, into Iraq's account at the US Federal Reserve, and the Ministry of Natural Resources in the Kurdistan Region will be compensated with $16 per barrel,” said Shatari.

The SOMO director detailed that a specialized consulting firm will be contracted by Baghdad to re-examine the production and transportation cost for each field, and the compensation will later be reevaluated based on the firm’s report.

“This agreement will not be temporary, but will establish long-term understandings and will serve as a final end to all the disputes we witnessed in the previous stage,” said Shatari. “It will also be a declaration of the seriousness of the federal government, the Kurdistan Regional Government, and the companies operating in Iraq to commit to implementing it and ending all manifestations of disagreement, suspicion of smuggling, or production outside of government control.”

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.

Both Kurdistan Region Prime Minister Masrour Barzani and Iraqi Prime Minister Mohammed Shia’ al-Sudani have hailed the agreement as a “historic” achievement.