Iraq government, Kurds strike deal on budget, oil exports in key step in anti-ISIS fight

Iraq's government and the autonomous Kurdish region have reached an agreement resolving a longstanding dispute over the budget and oil, in a move seen as a key step in improving cooperation against extremists. -- PHOTO: REUTERS
Iraq's government and the autonomous Kurdish region have reached an agreement resolving a longstanding dispute over the budget and oil, in a move seen as a key step in improving cooperation against extremists. -- PHOTO: REUTERS

BAGHDAD (AFP) - Iraq's government and the autonomous Kurdish region have reached an agreement resolving a longstanding dispute over the budget and oil, in a move seen as a key step in improving cooperation against extremists.

A statement from Iraqi Prime Minister Haider al-Abadi's office Tuesday said the deal was approved during a cabinet meeting also attended by Kurdish Prime Minister Nechirvan Barzani.

According to the deal, which is due to come into effect at the start of 2015, 250,000 barrels per day (bpd) of oil will be exported from the autonomous region and 300,000 from the disputed province of Kirkuk.

"We have reached an agreement with the Iraqi government which will benefit both parties and whereby we will export 250,000 bpd of regional oil and help the federal government export the Kirkuk oil," Barzani told reporters.

The deal would see oil from the Kurdish region or claimed by its leadership exported via Kurdish pipelines but through the federal oil company.

In return, Baghdad will release the Kurdistan Regional Government's share of national revenue, which had been frozen for more than a year in retaliation for Arbil's efforts to export oil unilaterally.

It will also give a share of its military budget to the Kurdish peshmerga fighters, who have been fighting militants of the Islamic State in Iraq and Syria (ISIS) group.

"The federal prime minister has expressed his readiness to guarantee one billion dollars from the Iraqi budget for the peshmerga forces," Barzani said.

Abadi's office simply said that the Kurdish military would get a percentage of the federal armed forces' budget.