Deputy Speaker says agreement reached to resume Kurdistan oil exports, salaries remain Baghdad’s responsibility

Peregraf

Deputy Speaker of the Iraqi Parliament and a senior leader of the Kurdistan Democratic Party (KDP), Shakhawan Abdullah announced in Kirkuk that an agreement has been reached between Baghdad and the Kurdistan Region on oil and non-oil issues, with Iraq’s State Oil Marketing Organization (SOMO) also signing a deal with Turkish companies to resume Kurdish crude exports.

“There is no commitment from the Kurdistan Region. What remains is for the Iraqi government to fulfill its moral and legal commitment to the agreement and send the salaries of the past two months,” Abdullah told reporters.

The statement came a day after Kurdistan Regional Government (KRG) Prime Minister Masrour Barzani announced that Baghdad and international oil companies had agreed to resume exports via the Kirkuk-Ceyhan pipeline. Speaking at the inauguration of the Shekhan–Lalish dual carriageway in Duhok, Barzani hailed the breakthrough as “a good start to eliminate obstacles,” but stressed that Baghdad must now release delayed salaries.

“I hope the agreement will be satisfied by everyone,” Barzani said. “The Iraqi government will implement the rights and financial entitlements of the Kurdish people, and salaries will no longer be the headlines.”

More than 1.2 million public employees in the Kurdistan Region are still awaiting their July wages, with September nearly half gone. Salary transfers have become directly tied to progress on oil exports.

The announcements follow a Reuters report that Iraq’s cabinet gave preliminary approval to a draft plan negotiated with the KRG and international oil firms. Under the proposal, the KRG would deliver at least 230,000 barrels per day (bpd) to SOMO while retaining 50,000 bpd for local use. Exports from Turkey’s Ceyhan port would be sold by an independent trader at SOMO’s prices. Producers would receive $16 per barrel into an escrow account, with the remainder transferred to SOMO.

While the draft does not settle nearly $1 billion in arrears owed to oil companies, industry executives told Reuters the talks are now at their most advanced stage. “We’re closer to a tripartite agreement than we’ve ever been, as all are showing flexibility,” one company representative said.

The KRG confirmed on September 17 that it had asked SOMO to formally take delivery of its crude, insisting it had “fulfilled all obligations.” Government spokesperson Peshawa Hawramani said Baghdad had “no justification” to further delay the transfer of July and August salaries.

SOMO Director General Ali Nazar Al-Shatri welcomed the move, calling it vital for unifying Iraq’s exports and boosting the country’s reliability as a supplier to European markets.

Exports from Kurdistan and Kirkuk have been halted since March 2023, when an international arbitration court ordered Turkey to pay Iraq $1.5 billion over unauthorized Kurdish shipments. Since then, Peregraf estimates Kurdistan has lost more than $28 billion in revenues, with total losses for Baghdad and Erbil exceeding $50 billion.

Analysts say a final agreement in the coming days could allow northern exports to resume before the end of this week, providing much-needed revenues for both governments and long-delayed relief for Kurdish public servants.