Iraqi Government Releases Details of Oil and Salary Agreement with Kurdistan Region

Kurdistan 06:27 PM - 2025-07-17

The logos of Federal and Regional Governments.

On Thursday, 17 July 2025, the Iraqi Council of Ministers held an extraordinary session chaired by Prime Minister Mohammed Shia’ al-Sudani, during which it approved a memorandum of understanding (MoU) signed between the Kurdistan Regional Government (KRG) and the federal government. The agreement covers matters related to oil, non-oil revenues, and public sector salaries.

In an official statement received by PUKMEDIA, the Prime Minister’s Media Office confirmed the approval and praised the key role played by Bafel Jalal Talabani, President of the Patriotic Union of Kurdistan (PUK), along with relevant ministers, in successfully facilitating the agreement.

The statement noted that the approval was based on the recommendations of the ministerial committee formed under the Prime Minister’s directive during the Council’s 27th regular session on 8 July 2025, and in accordance with Resolution No. 285 issued by the Kurdistan Regional Council of Ministers on 16 July 2025.

Council of Ministers Decisions:

1. Oil Delivery Arrangements:

•The KRG will immediately begin delivering all oil produced from the Region’s oil fields to the State Oil Marketing Organisation (SOMO) for export purposes.

•The federal Ministry of Finance will provide the KRG with an advance payment of $16 per barrel (either in cash or in kind), provided the daily volume delivered is no less than 230,000 barrels, with any increase based on joint measurements. In the event of a suspension in exports, the total daily production—currently 280,000 barrels—will be delivered to the Federal Ministry of Oil. Of this, 50,000 barrels are reserved for domestic consumption in the Kurdistan Region.

•The KRG will cover the production and transportation costs for the 50,000 barrels used locally. Revenue from derivative sales will be transferred to the federal treasury after deducting associated costs. If needed, the federal Ministry of Oil will supply the Region with petroleum products equivalent to up to 15,000 barrels per day of crude output. A joint committee from both the federal and regional ministries will assess actual needs and submit a report to the Federal Cabinet within two weeks.

2. Non-Oil Revenues:

•The KRG will make an initial transfer of 120 billion dinars for May 2025 to the federal treasury as part of the non-oil revenues, subject to later settlement following an audit.

•A working group comprising members of the Federal Ministry of Finance, the Federal Board of Supreme Audit, and their regional counterparts will audit and classify non-oil revenues from May onwards. Their findings, based on joint audit reports and the Federal General Budget Law, are to be submitted within two weeks.

•A joint federal-regional committee will be established to complete the Nationalisation of public sector salaries in the Kurdistan Region in line with the Federal Court’s decision. This process will be finalised within three months, after which funding will be limited to Nationalised salaries only.

•Another joint team will be tasked with reviewing overspending by the Region in accordance with the federal budget laws for 2023–2025. Their report is to be submitted within two weeks.


3. Salary Disbursement:

•The federal Ministry of Finance will begin disbursing May salaries to KRG employees once SOMO confirms receipt of the full daily oil quantity (currently 230,000 barrels) at the port of Ceyhan.

•All timelines outlined in the decision come into effect from the date of the Council’s approval.




PUKMEDIA