Baghdad, Erbil Reach Deal on Oil Exports

By John Lee.

Baghdad and Erbil have reached an agreement resolving the long-running dispute over oil exports and budget payments.

Finance Minister Hoshyar Zebari said that 550,000 barrels per day (bpd) of oil would be sent to the Iraqi oil ministry.

In return, the Kurds will receive their 17% share of the national budget.

The dispute had threatened the future of Prime Minister Haider al-Abadi's new unity government, the government in Baghdad has withheld budget payments to the Kurdistan Regional Government (KRG) For more than a year, in retaliation for its efforts to export oil unilaterally through Turkey.

Under the new agreement, the KRG will export 250,000 bpd of oil from its fields around Erbil through its pipeline to Turkey, where it will be handed over to Iraq's national State Oil Marketing Organization (SOMO).

BBC News reports that a further 300,000 bpd will also be exported from oil fields surrounding the disputed city of Kirkuk, which Kurdish Peshmerga forces have controlled since the Iraqi army withdrew in June.

According to The Guardian, the deal will also give a share of the military budget to the Kurdish peshmerga fighters; Kurdish Prime Minister Nechirvan Barzani said Abadi had guaranteed a $1 billion share.

The Special Representative of the United Nations Secretary-General for Iraq (SRSG), Mr. Nickolay Mladenov, welcomed the agreement, saying:

I look forward for the implementation of the agreement as swiftly as possible, including oil exports from the KR-I and Kirkuk, as well as the disbursement of the KRG budget from the Iraqi general budget, and the payment of Peshmergas’ salaries ...

“I commend both Iraqi Prime Minister Haidar al-Abadi and KR-I Prime Minister Nechirvan Barazani for their leadership and spirit of compromise in reaching this encouraging agreement."

(Sources: BBC News, Office of the Prime Minister, UN, The Guardian)

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