KRG to Deliver Oil to SOMO as Part of Federal Agreement to Resolve Salary Delays

Kurdistan 01:30 PM - 2025-07-31

The logos of federal and regional governments.

The Council of Ministers of the Kurdistan Regional Government (KRG), during its session on Wednesday, resolved to transfer all currently produced oil ready for export to the State Organisation for Marketing of Oil (SOMO) for export via the Port of Ceyhan.

A Positive Development

Sabah Habib, Representative of the Patriotic Union of Kurdistan (PUK) from Iraqi parliament, described the decision to PUKMEDIA as a "positive and constructive step" that reflects a shared understanding between the KRG and the federal government.

“This move helps address numerous longstanding issues and will also contribute to resolving the problem of delayed salary payments in the Kurdistan Region,” he said.

MP Habib further noted that the Ministry of Finance is capable of disbursing outstanding salaries and is not suffering from a liquidity shortfall. He added: “Delivering oil to SOMO relieves employees from the crisis of salary delays.”

Constructive Federal Response

MP Nazim al-Shibli, a member of the Parliamentary Oil and Gas Committee, told al-Sabah newspaper that the KRG’s decision was a serious and constructive gesture towards Baghdad.

“We hope to see this fully implemented through activation of the technical and legal frameworks under SOMO,” he said.

Al-Shibli emphasised that the federal government—via the Ministry of Oil and SOMO—had already expressed full technical and legal readiness to receive and market the Region’s oil in line with principles of transparency and fairness.

He stressed the parliamentary committee’s commitment to enforcing Federal Court decisions, ensuring market unity, and protecting the rights of all parties.

Al-Shibli added that the decision marks an opportunity to end the fragmentation of contracts and authorities, and urged for swift implementation of all executive procedures to support a new phase of coordination between Erbil and Baghdad.

Terms of the Agreement

The understanding between the KRG and the federal government stipulates that the Region will begin delivering all oil produced from its fields to SOMO for export. In return, the Federal Ministry of Finance will provide the KRG with an advance of $16 per barrel (either in cash or in-kind) under the Budget Amendment Law—provided that the daily quantity delivered is no less than 230,000 barrels, with any increases accounted for by the Joint Measurement and Calibration Committee.

If exports are interrupted for any reason, the full amount must be handed over to the Federal Ministry of Oil.

The agreement anticipates total production reaching 280,000 barrels per day, with 50,000 barrels allocated for local consumption, and the remaining 230,000—plus any increase—delivered to SOMO for export.

Additionally, the KRG is required to remit 120 billion dinars as an initial payment of the federal share of non-oil revenues for May, which will later be reconciled following a federal audit.

The Ministry of Finance will begin disbursing May salaries for KRG employees after SOMO confirms receipt of the full export volume (currently 230,000 bpd) at Ceyhan, in accordance with the law.



PUKMEDIA