KRG Deputy PM Qubad Talabani: Optimistic for Breakthrough in Oil and Salary Talks with Baghdad

Peregraf

Kurdistan Regional Government (KRG) Deputy Prime Minister Qubad Talabani expressed optimism that an agreement with the Iraqi federal government is within reach, as negotiations continue over oil exports and delayed public sector salaries.

"The talks between the negotiating delegations of both sides have been positive in the past few days, and we are optimistic that we will reach an agreement soon and resolve the salary issue of the Kurdistan Regional Government employees," Talabani said during a meeting with French Ambassador to Iraq, Patrick Dorrel.

Talabani added that the KRG remains committed to securing a deal that ensures the financial entitlements of the Kurdistan Region’s civil servants.

The renewed optimism comes amid intensifying talks between Erbil and Baghdad, now in their fifth consecutive day. However, the path to resuming oil exports remains blocked by a long-standing dispute over nearly $1 billion in unpaid debts to international oil companies (IOCs) operating in the region.

A source familiar with the negotiations told Peregraf that "Baghdad is not ready to repay the debt" despite repeated appeals from the KRG. The oil companies, represented by the Association of the Petroleum Industry of Kurdistan (APIKUR), have demanded the settlement of back payments and assurances for future revenues. They have proposed a staggered repayment plan, contingent on binding guarantees.

Since the start of 2025, more than ten bilateral meetings and several trilateral discussions involving oil firms have taken place without a breakthrough.

Public frustration continues to mount in the Kurdistan Region, where civil servants have yet to receive their May salaries. Baghdad has tied the release of funds to the KRG’s compliance with budget obligations, particularly the handover of oil and domestic revenues.

"There has been an understanding on the amount of revenue to be handed over to Baghdad," the source said. "Now the issue of oil exports through SOMO is the main obstacle."

The 2023–2025 federal budget law requires the KRG to deliver 400,000 barrels per day (bpd) to Iraq’s State Oil Marketing Organization (SOMO). However, Baghdad has proposed restarting at 185,000 bpd, gradually ramping up the volume. The Kurdistan Region currently produces about 300,000 bpd, most of which is consumed domestically.

Exports through Turkey’s Ceyhan port have been suspended since March 2023, following an International Court of Arbitration ruling in favor of Iraq. The export halt has cost the KRG more than $32 billion in lost revenue, according to APIKUR.

A February 2025 amendment to the budget law created a federal committee to review the cost of oil production in the Kurdistan Region. Until the review concludes, Baghdad will compensate the KRG at a flat rate of $16 per barrel.

Despite repeated pledges by Iraqi officials, including Oil Minister Hayan Abdul Ghani, no exports have resumed. The outcome of the current negotiations will determine whether the region’s oil can once again flow to international markets—along with much-needed salaries for KRG employees.