KRG and Federal Government Advance Oil Export and Financial Talks

Kurdistan 11:54 AM - 2025-09-18

Resuming oil exports resolves the salary issue.

Negotiations between the Kurdistan Regional Government (KRG) and the federal government continue to resolve financial issues and resume oil exports from the Kurdistan Region via the State Oil Marketing Organization (SOMO).

PUKMEDIA has learned that the ongoing discussions have yielded significant progress and positive outcomes.

Federal Council of Ministers Decisions

At its session on Tuesday, 16 September 2025, the Federal Council of Ministers issued two key decisions concerning the management of foreign oil companies and the resumption of Kurdistan Region oil exports.

The first decision relates to company dues. The Council agreed that the $16 extraction fee per barrel for oil produced in the Region will be paid to the companies in cash rather than in kind.

The second decision grants preliminary approval for the tripartite contract between the federal government, the KRG, and the oil companies operating in the Region, subject to review by the advisory committee at the federal Ministry of Oil. The committee is expected to provide its final opinion within 48 hours.

Significance of the Agreement

Former MP Shirwan Mirza told PUKMEDIA: “The Council of Ministers’ recent decision is an important step. It resolves the longstanding issue for companies operating in the Kurdistan Region, providing oil instead of cash to cover extraction and export costs.”

He added: “This latest agreement between the KRG and the federal government is crucial. Once oil exports resume, issues related to non-oil revenues can be addressed more easily, resolving most of the outstanding problems.”

KRG Fulfils Obligations

The KRG confirmed that it has met all constitutional obligations and demonstrated unprecedented flexibility in addressing longstanding obstacles previously cited as reasons for withholding salaries.

During its meeting on Wednesday, the Kurdistan Regional Council of Ministers emphasised that these issues must not hinder the disbursement of employees’ dues, which are their legitimate right, and stressed the federal government’s responsibility to pay salaries.

Cabinet Secretary Amanj Rahim presented a report on the latest joint proposal between the federal and regional governments to expedite the resumption of oil exports. The proposal, approved by the federal cabinet on Tuesday following ratification by the regional cabinet last week, outlines that all oil produced in the Region (apart from domestic consumption) will be handed over to SOMO, contingent on signing the tripartite agreement. Negotiations have advanced well and are expected to conclude by the end of this week.

Pending the agreement, the Kurdistan Region will deliver its oil share to the federal Ministry of Oil. The Cabinet instructed the Minister of Natural Resources and the negotiating team to take all necessary measures, stressing the federal government’s obligation to fulfil salary payments.

Implementing the Agreements

Mirza noted that the current government can implement the agreements with the KRG even if it becomes a caretaker administration following elections. He explained that execution is straightforward, as oil will be provided in place of cash to companies, making it manageable for any future government.

Federal Government Conditions

MP Jamal Kochar, a member of the Parliamentary Finance Committee, told PUKMEDIA that the federal government has three conditions for releasing salaries in the Kurdistan Region: the resumption of oil exports, the transfer of non-oil revenues, and Nationalisation (Tawtin) of salaries. He added that most of these conditions have already been agreed upon by both sides.

Kochar concluded: “If oil exports resume and non-oil revenues are resolved by the State Council, the issue of employee salaries will largely be resolved, ensuring that at least the remaining months of this year’s salaries are paid to employees in the Kurdistan Region.”



PUKMEDIA