ERBIL, Kurdistan Region - Negotiations between Erbil and Baghdad on resuming Kurdish oil exports have stalled, as the two sides have failed to reach consensus on a formal, written agreement, a source in Erbil familiar with the talks told Rudaw on Tuesday. Speaking on condition of anonymity due to the sensitivity of the discussions, the source said, “The federal government has not agreed to put the agreement in writing and wants it to remain verbal.” In contrast, “The Kurdistan Regional Government [KRG] insists on a written deal.” According to the same source, Baghdad’s reluctance stems from concerns that a formal agreement could be exploited by political rivals of Iraqi Prime Minister Mohammed Shia’ al-Sudani ahead of Iraq’s legislative elections, slated for November 11. Rudaw learned on Tuesday that a KRG delegation, led by Acting Natural Resources Minister Kamal Mohammed, returned to Erbil earlier this week after three days of talks in Baghdad aimed at resolving long-standing oil disputes. On Sunday, informed sources from both Erbil and Baghdad told Rudaw that the talks had been progressing in a “calmer environment,” breaking past tensions. However, one of the main sticking points remains the volume of oil that the KRG is required to deliver to Iraq’s State Oil Marketing Organization (SOMO). While Baghdad insists the KRG must export 400,000 barrels per day (bpd), Erbil has proposed an initial volume of 280,000 bpd, the sources added. Oil exports from the Kurdistan Region via the Iraq-Turkey pipeline have been halted since March 2023. This followed a ruling by a Paris arbitration court that found Turkey had violated a 1973 pipeline agreement by allowing Erbil to export oil independently of Baghdad’s consent. Kurdistan Region Prime Minister Masrour Barzani stated last week that the suspension of exports has cost the Region over $25 billion in lost revenue. In February, Iraq’s parliament amended the federal budget law to include a $16-per-barrel fee to cover production and transportation costs for international oil companies (IOCs) operating in the Region. The amendment also requires both governments to jointly appoint an international consultancy to audit and assess those costs. If they cannot agree on a firm, the Iraqi cabinet will make the selection. These changes were intended to facilitate the resumption of Kurdish oil exports. A technical delegation from Baghdad visited Erbil last Wednesday to discuss revenue-sharing mechanisms and other unresolved issues. Finalizing an agreement is seen as crucial to resuming payments to more than 1.2 million public sector employees in the Kurdistan Region. In late May, Iraq’s finance ministry halted all budget transfers to the KRG, accusing the Region of exceeding its 12.67 percent share of the federal budget - a claim rejected by Kurdish political parties, who denounced the decision as unconstitutional and politically motivated. Hastyar Qadir contributed to this piece.
