Baghdad and Erbil Approve Deal to Resume Salaries and Oil Exports

Iraq's Council of Ministers approved a new financial agreement with the Kurdistan Regional Government, paving the way for the resumption of salary payments to the Region's public employees and the restart of Kurdish oil exports.

Tensions between Baghdad and Erbil escalated in late May when the federal finance ministry suspended transfers, accusing the KRG of exceeding its 12.67 percent share of the federal budget and failing to deliver agreed oil volumes to SOMO. The freeze affected more than 1.2 million public sector employees in the Kurdistan Region.

According to the agreement, the KRG is obliged to export all oil produced from its fields, estimated at 230,000 barrels per day, through SOMO, retaining 50,000 barrels per day for local consumption, while the federal Ministry of Finance pays 16 dollars per barrel as a production fee. The deal was set to remain in effect through the end of the year as a framework for financial cooperation. (Rudaw)