PM Barzai Lauds Iraq’s Budget Amendment, Eyes Resolution for Salary and Oil Export Issues

Peregraf 

Kurdistan Regional Government (KRG) Prime Minister Masrour Barzani has welcomed the Iraqi parliament’s approval of an amendment to the federal budget law, calling it a crucial step toward resolving financial disputes between Erbil and Baghdad.

“We thank all those who helped make the amendment a success. We also thank the KRG negotiating team for working to establish a mechanism to resolve the salary issue,” Barzani stated. “We hope that this positive step will lead to resolving all other outstanding issues and ensure the federal government’s commitment to sending salaries and financial entitlements to the Kurdistan Region.”

The Iraqi parliament passed the amendment today, which is expected to facilitate the resumption of oil exports from the Kurdistan Region. Kurdish MP Dilan Ghafoor told Peregraf that the approved amendment, submitted by the Iraqi government, sets the cost of production and transportation of Kurdistan’s oil at $16 per barrel, to be covered by the Iraqi Ministry of Finance.

The KRG and oil companies have expressed satisfaction with the allocation, which is expected to ease the process of restarting exports. However, the $16 per barrel rate is a temporary measure. Within 60 days, a specialist company—appointed by mutual agreement between the KRG and the Iraqi federal government—will conduct an independent assessment to determine the actual production and transportation costs of Kurdistan’s oil fields.

As per the amendment, oil from the Kurdistan Region will be handed over to the Iraqi State Organization for Marketing of Oil (SOMO), with all revenue directed to the Iraqi treasury.

Oil exports from the Kurdistan Region and Kirkuk have been halted since March 25, 2023, following a ruling by the International Court of Arbitration in Paris in favor of Iraq, in a case against Türkiye. The ruling led to the suspension of exports through the Ceyhan pipeline, significantly impacting the Kurdistan Region’s economy.

With the latest amendment, hopes are rising for a resolution that could bring much-needed stability to the Kurdistan Region’s financial situation and its relations with Baghdad.