Iraq seals export deal with Kurdistan
Kurdish authorities will pump 150,000 bpd to Iraqi government export tanks in the Turkish port of Ceyhan
Baghdad will receive a share of Kurdish oil revenue under a deal it recently made with the oil-rich semi-autonomous Kurdistan region, Reuters has reported.
In return Iraq has agreed to pay $500mn towards funding Kurdish civil servant salaries, Iraq's finance minister said on Wednesday.
Reuters reported that the accord is aimed at reducing the friction between Baghdad and Kurdish authorities as they face a common threat from IS insurgents who have seized large parts of the north and west of the country.
Finance Minister Hoshiyar Zebari said that the Kurdish Regional Government began pumping oil to State Oil Marketing Organisation (SOMO) tanks at Ceyhan on Tuesday and the $500mn was transferred on Wednesday.
"This payment will be followed by other payments," Zebari told a news conference in Baghdad.
Under the agreement reached last week, Kurdish authorities committed to pump 150,000 barrels per day of oil - around half their overall shipments - to Iraqi government export tanks in the Turkish port of Ceyhan.
Speaking at an energy conference in Rome, Italy, the Turkish energy minister Taner Y?ld?z said: “Income from oil contributes toward the stability of Iraq, and we [Turkey] argued from the beginning that it belongs to all of Iraq, both north and south."
"Turkey has done its share of work to form and protect such a system,” he added.
Earlier this year Baghdad cut the Kurds' share of the central budget to punish them for exporting oil without its consent.
However, the region continued pumping oil through its independent pipeline to Turkey with exports reaching up to around 300,000 bpd.