Latest news with #public sector salaries
Asharq Al-Awsat
21-07-2025
- Business
- Asharq Al-Awsat
‘Oil-for-Salaries' Deal Ends Dispute Between Baghdad and Erbil
The Iraqi federal government and the Kurdistan Regional Government (KRG) reached a landmark agreement on Thursday that ends a years-long dispute over oil revenues and public sector salaries. The deal, announced following an emergency cabinet meeting in Baghdad, covers oil production handover, non-oil revenue sharing, and the resumption of salary payments to KRG employees beginning with May 2025. According to a government statement, the agreement was based on a recommendation by a ministerial committee and aligned with Kurdistan's regional cabinet decision No. 285, issued on July 16. KRG Prime Minister Masrour Barzani confirmed the breakthrough, stating that the federal government had approved a 'mutual understanding regarding salaries and the region's financial entitlements.' Under the terms of the deal, the KRG will hand over all crude oil production - currently 280,000 barrels per day (bpd) - to Iraq's State Oil Marketing Organization (SOMO), with the exception of 50,000 bpd reserved for domestic consumption. This marks the first such commitment in more than two years, during which oil exports were suspended amid ongoing disputes and recent drone strikes targeting northern oilfields operated mostly by US firms. In return, the federal Ministry of Finance will pay $16 per barrel, in cash or in kind, to cover production costs. Revenues from locally consumed oil derivatives will go to the federal treasury after deducting production and transport expenses. On non-oil revenues, the KRG will transfer an initial 120 billion Iraqi dinars (approx. $92 million) to the federal finance ministry, representing an estimate of Baghdad's share for May. A joint audit team from both governments will verify and finalize the figures within two weeks. To resolve long-standing disputes over public salaries, a new joint committee will oversee the localization of KRG employee payrolls, in line with a ruling from the Federal Supreme Court. The committee is expected to complete its work within three months. As part of the agreement's first phase, the federal government will begin disbursing May salaries following confirmation from SOMO that the agreed oil volumes have been received.
The National
17-07-2025
- Business
- The National
Iraq strikes new deal with Kurds on oil exports and salary disputes
The Iraqi cabinet approved on Thursday a long-anticipated agreement with the semi-autonomous Kurdistan Region that that could reset their strained relationship over oil exports and public sector salaries. According to a statement issued after an extraordinary meeting, the Kurdistan Regional Government will 'immediately begin delivering all the crude oil produced from the region's oilfields' to the state oil marketer SOMO for export. In return, the Iraqi Ministry of Finance will be 'committed' to pay the Kurdish region $16 per barrel, a price set late last year in amendments to the federal budget law and approved by the cabinet, the statement added. At least 230,000 barrels per day will be handed over to Baghdad out of the region's current total production of 280,000 barrels per day, it said. The remaining 50,000 barrels will be reserved for local consumption. 'Any further increase in production will be handed over to SOMO,' it said. As a goodwill gesture and the first step in implementing the deal, the federal Ministry of Finance will release May salaries for public sector employees, pending verification that the oil volumes have been received at the Turkish port of Ceyhan. The measure aims to bring immediate relief to tens of thousands of public servants in the Kurdish region who have faced months of uncertainty over delayed payments. Kurdistan will also transfer an initial estimated amount of 120 billion Iraqi dinars ($91.6 million) for May as a share of non-oil income, according to the agreement. A joint team will audit revenue and determine the federal share going forward. The deal also stipulates that a three-month plan will be launched to complete the process of paying public sector employees' salaries through bank accounts. The control over the development of natural resources has been one of the thorniest issues since the 2003 US-led invasion that toppled Saddam Hussein and helped the Kurds gain official semi-autonomy. The Kurds argue that the country's constitution allows them to sign deals bypassing Baghdad, while the federal authorities maintain this is illegal. That struggle has forced Baghdad at some points to withhold Kurdistan's share in the budget, plunging the region into economic hardships. In early 2022, the Kurdish region's oil sector suffered a major blow when the Federal Supreme Court ruled that the regional law regulating the industry was unconstitutional. The court demanded it hand over all oil sector activities to Baghdad – including exports. A year later, an arbitration ruling forced the region's exports through Turkey to halt, cutting off a major source of revenue for Erbil, the capital of the Kurdish region, and leaving it struggling to fulfil salary payments. Throughout that period the two sides failed to reach agreement.
