By Ahmed Rasheed
BAGHDAD Feb 19 Iraqi Kurdistan has agreed to
export crude via the country's main oil marketing body, Deputy
Prime Minister for energy Hussain al-Shahristani said,
potentially removing a major sticking point in a resource row
with the central government.
The autonomous region's prime minister and top energy
official travelled to Baghdad earlier this week, intensifying
efforts to settle the long-running dispute over exports of oil
from Kurdistan via a new independent pipeline to Turkey.
The region has previously insisted it will export crude on
its own terms, bypassing Iraq's State Oil Marketing Organisation
(SOMO), but Shahristani said the Kurds had finally relented.
"After hours of meetings, we have agreed that our brothers
in the region will be represented in SOMO and agreed that this
is the sole national outlet responsible for exporting oil,"
Shahristani said in an interview on Iraqi state television late
on Wednesday. "This is an important step forward".
Baghdad has repeatedly threatened to sue Ankara and slash
Kurdistan's share of the national budget if exports go ahead
through the pipeline without its consent.
The pipeline was completed late last year, and oil has since
been pumped through it into storage tanks at Turkey's Ceyhan,
but exports from the Mediterranean port are on hold to give
diplomacy a chance.
Negotiations have carried on for months with little progress
and Shahristani said differences remained over revenue-sharing.
"The second issue that is still unresolved is that they want
the revenue from oil exports to be deposited in a private
account for the region in the DFI (Development Fund for Iraq),"
Revenue from the sale of Iraq's oil is paid into the DFI in
New York for Baghdad to disburse.
Kurdistan is entitled to a 17 percent share, but says it in
fact receives far less than that, and in recent weeks has
accused Baghdad of withholding funds, leaving civil servants in
the region unpaid.
Shahristani said the finance ministry had now sent enough
cash to cover the salaries of Kurdish government employees for
January, but faced a liquidity crisis and would not be able to
pay in February or after that unless the region resumed oil
"The Finance Ministry said it will not be able to keep
paying salaries whilst the region is still not delivering oil,"
he said. "The ministry has stopped payments to the region and
the only solution for this real problem if for the region to
start exporting oil"
Crude from Kurdistan used to reach world markets through a
Baghdad-controlled pipeline, but exports via that channel dried
up due to a row over payments for oil companies operating in the
Since then, the Kurds have been exporting smaller quantities
by truck across the border whilst building the pipeline to
Turkey and negotiating a multi-billion dollar energy deal with
(Writing by Isabel Coles, editing by David Evans)