KRG ‘reiterates its commitment’ to oil, financial agreement with Baghdad
ERBIL (Kurdistan 24) – The Kurdistan Regional Government (KRG) in a virtual cabinet meeting this week reiterated its commitment to its agreement on oil and finances reached last year with Baghdad to secure the region’s share in the Iraqi federal budget.
The regional Council of Ministers session comes as the region witnesses drastically falling oil prices in the wake of the global coronavirus pandemic and following the return of a high-level delegation that visited Baghdad on Sunday to discuss a mutual oil output cut and the region’s budget allocation.
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“The cabinet reiterated its commitment to the agreement reached with the Iraqi Ministries of Oil, Finance and Planning in late 2019 concerning this year's budget,” read the statement.
Ministers also pledged to “do their best” to pay the salaries of the region’s public servants on time, but said that “any payment delays will be due to falling oil prices and the coronavirus lockdown measures, as well as the delay in receiving the KRG's budget allocation from Baghdad,” the statement noted.
After a protracted and near-total breakdown of ties between Erbil and Baghdad following the Kurdistan Region's September 2017 independence referendum, the governments eventually converged on a range of issues, especially after Prime Minister Adil Abdul Mahdi came into office in late 2018.
This included a comprehensive oil agreement that requires Erbil to hand over 250,000 barrels per day (bpd) in return for, among other things, securing the region’s allocation in the Iraqi federal budget. The Kurdistan Region did not implement the oil handover, but in late 2019, Erbil again renewed the agreement amid new negotiations.
Read More: Erbil-Baghdad oil agreement to go into effect on Jan. 1, 2020: Minister
Oil and budget have been the major source of dispute between the central government and KRG since the region began to export its oil independently.
With the fall of oil prices that are expected to cause the country a huge budget deficit, fears over cutting KRG’s budget allocation are growing among both government officials and the general public just as Iraq faces a resurgence of Islamic State attacks and a coronavirus lockdown that further darkens the nation’s economic outlook for the foreseeable future.
Editing by John J. Catherine