Iraqi Government Extends Oil Agreement with KRG for Another Year
The extension comes as Iraq’s three-year federal budget for 2023–2025 approaches its expiry at the end of this year, raising questions over future financial arrangements between the federal government and the Kurdistan Region.
ERBIL (Kurdistan24) – The Iraqi Council of Ministers has approved an extension of the oil agreement with the Kurdistan Regional Government (KRG) for the coming year, a move aimed at maintaining financial coordination between Baghdad and Erbil, according to a source within the council.
The source said the Kurdistan Region’s non-oil revenue contribution of 120 billion Iraqi dinars will remain unchanged. Under the arrangement, the KRG continues to transfer this amount to Iraq’s Ministry of Finance in return for the payment of public sector salaries in the Kurdistan Region.
However, the council did not decide on the payment of salaries for November and December for Kurdistan Region public employees during its latest meeting, the source added.
The extension comes as Iraq’s three-year federal budget for 2023–2025 approaches its expiry at the end of this year, raising questions over future financial arrangements between the federal government and the Kurdistan Region. Earlier, Hamdi Sinjari, Deputy Head of the State Oil Marketing Organization (SOMO), stated that renewing the oil agreement would proceed smoothly and without complications.
In a related development, Iraqi Prime Minister Mohammed Shia al-Sudani has instructed the Ministry of Finance to pay the October salaries of Kurdistan Region public employees. The ministry has confirmed its readiness to disburse the funds once the necessary allocations are received.
Financial relations between Baghdad and Erbil have long been shaped by disputes over oil exports, revenue sharing, and budget transfers. Under the current framework, the Kurdistan Region delivers non-oil revenues to the federal government, while Baghdad is responsible for covering public sector salaries in the Region.
Oil exports from the Kurdistan Region (KRG) officially resumed on September 27, marking the end of a 30-month suspension that began in March 2023. This restart was made possible by a landmark tripartite agreement between the KRG, the Iraqi federal government in Baghdad, and international oil companies (IOCs). Despite this, uncertainty remains over the payment of salaries for November and December, as well as other financial entitlements, even though the KRG has already submitted salary lists for those months to Baghdad.