ARTICLE AD BOX
The Iraqi Cabinet, headed by Prime Minister Mohammed Shia Al-Sudani, held an emergency session on Thursday and issued a series of binding decisions regarding oil production and financial coordination with the Kurdistan Regional Government (KRG).
In a major development, the Cabinet approved the immediate transfer of all oil produced in the Kurdistan Region to Iraq's State Oil Marketing Organization (SOMO)for export. The federal government will provide the KRG with an advance of $16 per barrel (in-kind or in cash), based on a minimum delivery of 230,000 barrels per day (bpd), with any additional production to be included under the same mechanism.
Current production stands at 280,000 bpd, of which 50,000 bpd is reserved for local consumption within the Region. The remaining 230,000 bpd, along with any future increases, will be delivered to SOMO. Should exports stop for any reason, the KRG must deliver the full quantity to the Federal Ministry of Oil instead.
The KRG will also be responsible for the production and transport costs of the 50,000 bpd used locally, while revenues from sales of refined products will be transferred to the federal treasury after deducting those costs.
Additional financial decisions included:
- The KRG must deliver 120 billion Iraqi dinars as a preliminary estimate of May's non-oil revenue share.
- A joint auditing team will verify and classify non-oil revenues from May 2025 onward.
- A new joint committee will oversee the localisation of salaries in the Region within three months, as required by a federal court ruling.
- A separate team will assess any excess in actual spending relative to the KRG's budget share for 2023-2025.
- May salaries for KRG employees will be disbursed after SOMO confirms receipt of the 230,000 bpd via the Ceyhan terminal.
All timelines specified in this resolution are effective from the date of the Cabinet's approval.
(Source: PMO)
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