September 14, 2012 / 12:55 PM / 7 years ago

UPDATE 1-Kurdistan to keep Sept oil output steady in Baghdad deal

BAGHDAD, Sept 14 (Reuters) - Iraq’s autonomous Kurdistan said on Friday it would keep its oil production for export at 140,000 barrels per day this month before raising it to 200,000 bpd for the rest of the year, as part of a deal with Baghdad to end a dispute over oil payments.

Under the agreement, Baghdad will also pay 1 trillion Iraqi dinars or around $857 million for foreign companies working in the Kurdish region, the Kurdistan Regional Government said.

The deal, first announced on Thursday, will resolve only part of a broader feud between Baghdad and Kurdistan over oil and territory that has involved major companies including Exxon Mobil, Chevron and Total.

“It was agreed to form a permanent committee to follow up on the terms agreed, and give the committee authority to resolve any obtacles blocking implementation,” the Kurdistan government said in its statement.

Kurdistan in April halted shipments of its oil in protest over what it said were payments due from Baghdad to companies. It restarted shipments later, but had said it would halt them again by Sept. 15 if there was no agreement on payment.

Baghdad and Kurdistan are still fighting over major oil companies like Exxon and Chevron who have signed exploration deals with the Kurdistan Regional Government, contracts the central government says are illegal.

Kurdistan, autonomous with its own government and armed forces since 1991, gets central government funding and uses national pipelines to ship its oil. Baghdad says only the central government has the right to ship oil and gas.

A long-delayed oil law that aims to resolve the disputes over crude has been caught in political infighting for years, though both Baghdad and Kurdistan say that there is progress on reaching an agreement on that legislation.

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