Iraq and the semi-autonomous region of Kurdistan Region of Iraq (KRI) have reached a deal that will ease tensions over the regional oil exports and civil service payments from Baghdad, according to Iraq’s finance minister
Hoshiyar Zebari told Reuters that the federal government had agreed for the time being to resume payments from the federal budget for Kurdistan Region of Iraq’s civil servants’ salaries.
Zebari has described the step as a ‘major breakthrough’ that would reduce friction between the Kurdistan Regional Government and Baghdad. He said the payments would cover October and then November this year.
The deal was reached after talks between Iraqi oil minister Adel Abdel Mehdi and KRI’s Prime Minister Nechirvan Barzani in the Kurdistan region in second week of November 2014.
Baghdad had stopped paying for KRG civil servant salaries in protest against the Kurds’ exporting oil to Turkey independently.
Under the agreement, KRI will give 150,000 bpd of oil exports — equal to around half its overall shipments — to the federal budget.
In Erbil, the KRG also confirmed the agreement.
Safeen Dizayee, spokesman of KRG, said, “What they have agreed is that Baghdad will release some funds, around US$500mn, and the KRG will give 150,000 bpd to Baghdad.”
He said a KRG delegation headed by the regional Prime Minister would travel to Baghdad soon to chart out a more comprehensive deal and the regional government would not hand over control of exports to Baghdad.
A similar agreement was proposed in April this year but never advanced to a deal.
There are about five million Kurds in majority Iraq, which has a population of more than 30mn. Most live in the north, but remain reliant on Baghdad for a share of the national budget.
