Erbil, Kurdistan Chronicle — After months of negotiations, the Kurdistan Regional Government (KRG) announced on Tuesday that it reached an agreement with the federal government on their oil dispute. The region's oil exports to Turkey, halted following a court ruling, are now set to resume.
The agreement stipulates that Iraq's state oil company, SOMO, will coordinate with the KRG's Ministry of Natural Resources to market the Kurdistan Region's oil. Revenues will be deposited into an account at the Iraqi Central Bank that will be controlled by the KRG and overseen by the Iraqi government.
Kurdistan Region Prime Minister Masrour Barzani emphasized in a statement that the new deal, which is expected to create a basis for renewed mutual trust, should be implemented as soon as possible.
"Today I signed an agreement with Prime Minister Mohamed Shia’ Al Sudani that lays foundations for a new era of robust, lasting cooperation between Erbil and Baghdad," he said in his statement.
"This pact serves the interests of the whole country, including the Kurdistan Region. We also agreed that we now have a framework for a draft budget law and, in the near future, discussions can begin on a new federal oil and gas law," the Kurdish prime minister added.
For his part, Iraqi Prime Minister Mohamed Shia al-Sudani described the deal as a first step towards resolving all other issues, adding “our interest is in implementing the constitution and protecting all Iraqi people’s interests.”
The agreement is seen as a temporary solution to the long-standing dispute between the two sides, until a final agreement is reached on the federal budget and oil and gas laws. Barzani confirmed this in his statement, calling the agreement "temporary but all its principles will be reflected in the federal budget and the oil and gas law.”
لەگەڵ حکومەتی فیدراڵی ڕێککەوتنێکمان کرد کە ڕێز لە مافە دەستورییەکانمان بگرێت و عێراق بەرەو ئایندەیەکی باشتر ببات.
— Masrour Barzani (@masrourbarzani) April 4, 2023
ڕۆڵی هاوڕێم @mohamedshia بەرز دەنرخێنم بۆ پابەندبوونی بە قۆناغێکی نوێی هەماهەنگیی و هاریکاریی نێوان هەولێر و بەغدا. pic.twitter.com/XBxBXiI9YW
The Kurdistan Region President Nechirvan Barzani also welcomed the deal, saying, "I commend the role of the Prime Minister of Iraq and the Prime Minister of the Kurdistan Region, who were able to reach an understanding and agreement in a positive spirit. Thanks to the teams of both sides for conducting a successful discussion that led to this agreement. We hope that it will be implemented as it is, and become the beginning of resolving other problems."
Erbil and Baghdad were caught in disputes over oil and budget for years. In 2022, the federal Supreme Court of Iraq ruled that the KRG’s legal basis for the exports was unconstitutional. Back then, the KRG denounced the ruling and called it “politically motivated”.
The dispute had also affected several international oil companies operating in the Kurdistan Region, with some announcing in March that they were halting operations in response to the oil stoppage. Like its federal counterparts, the KRG is dependent on oil sales for the majority of its revenue. A long-term stop could hurt the Kurdistan Region’s economy, not to mention further KRG-federal tensions in Iraq.
Today’s agreement is seen by almost all the stakeholders as a positive step towards resolving the long-standing oil dispute between the KRG and the federal government. However, both sides will need to continue negotiations to reach a final agreement on the federal budget and oil and gas laws to ensure the long-term stability of the region.
Today, our relationship with Baghdad is strengthened and we can embark on a new era of trust and cooperation -mb.
— Masrour Barzani (@masrourbarzani) April 4, 2023
My full statement: https://t.co/mmUDDY58hm pic.twitter.com/QB0zh3Q9Rl
