Kurdistan Region Nears Final Agreement with Baghdad on Non-Oil Revenues, PM Barzani Says

Peregraf

Kurdistan Region Prime Minister Masrour Barzani announced Tuesday that his government is close to finalizing an agreement with Baghdad over non-oil revenues, as part of ongoing efforts to stabilize relations with the federal government and resolve the region’s financial crisis.

Speaking to reporters, Barzani said that while oil export issues have largely been addressed, one outstanding matter remains between international oil companies and Baghdad. “What remains is a point between the companies and the federal government; the companies are now requesting guarantees for the continued provision of their financial dues,” he noted.

Barzani’s comments come as more than 1.2 million public sector employees in the Kurdistan Region have gone unpaid for two months. Salary disbursements are tied to agreements between Baghdad and Erbil, particularly over oil deliveries and revenue sharing. On September 9, the Kurdistan Region’s Ministry of Finance and Economy confirmed that it submitted the August salary list to Iraq’s Federal Ministry of Finance, but salaries for July and August have not yet been released.

The August 11 deal between Erbil and Iraq’s Ministry of Oil was seen as a breakthrough. Under the arrangement, the Kurdistan Region will retain 50,000 barrels per day (bpd) for domestic consumption, while the remainder will be handed over to Iraq’s State Oil Marketing Organization (SOMO) for export through Turkey.

However, officials stress that resuming full international exports still hinges on a separate agreement between Baghdad and Ankara, whose pipeline has been shut since March 2023 following an international arbitration ruling. That suspension halted independent Kurdish exports and ordered Turkey to pay damages to Baghdad. The shutdown has since cost Iraq and the Kurdistan Region an estimated $50 billion, according to KRG officials.

Despite the unresolved pipeline issue, Barzani’s remarks signal progress in other areas of fiscal coordination, particularly around non-oil revenues such as customs, taxes, and border fees. Reaching a final agreement could ease tensions between Baghdad and Erbil and help unlock much-needed funds to cover delayed public sector wages.