On 2 December 2014 the Kurdistan Regional Government (KRG) delegation, headed by Prime Minister Nechirvan Barzani, concluded an agreement with the Federal Government of Iraq concerning outstanding issues between the Central and the Regional Government. Prior to returning from Baghdad to Erbil, Prime Minister Barzani explained the agreement to the media, saying that the KRG will deliver 250,000 barrels of oil per day from oilfields in the Kurdistan Region to Baghdad and will assist them in exporting Kirkuk oil. In turn, the Federal Government of Iraq will provide the Kurdistan Region with a 17 percent share of the federal budget, a seat on the Iraqi State Organization for Marketing of Oil (SOMO), and a one-time payment over 840 million Euros for Peshmerga salaries and weapons.
The KRG Prime Minister highlighted the meetings, saying, “During the past two days we have been here in Baghdad in order to address issues between the Kurdistan Region and Baghdad. We conducted several meetings with the Iraqi Prime Minister, the Oil Minister, and other ministers. Different teams focused on different negotiations. We completed our visit today.”
Speaking about the conduct and atmosphere at the meetings the Prime Minister said, “I would like to say the meetings were generally positive. We saw a real desire by the Iraqi Prime Minister, the Iraqi Oil Minister, and all other ministers in Prime Minister Abadi’s government to resolve important issues with the Kurdistan Region. I want to emphasize and reiterate that our preference from day one was to resolve all issues through dialogue. We preferred this option and believe it is the best option.”
Regarding the agreements, Prime Minister Barzani said, “After the former Iraqi Prime Minister unilaterally cut the share of the Kurdistan Region from the Iraqi budget we have attempted to resolve the issue through dialogue. Fortunately, we reached an agreement with Prime Minister Abadi and his team on a number of issues. We believe the agreement is transparent and serves the interests of both the Kurdistan Region and Baghdad. Both sides came out of these negotiations successfully.”
On the issue of the Peshmerga forces dues which was one of the main unresolved issues, Prime Minister Barzani said, “Prime Minister Abadi offered his respect and gratitude to the Peshmerga forces, especially in the struggle and sacrifices they have been making on the battlefield fighting against ISIS terrorism. Baghdad agreed to allocate 1.2 trillion Iraqi Dinars (approx. 840 million Euros) for the Peshmerga.”
Prime Minister Barzani added: “I can say that, in general, we are pleased with this agreement and consider it a gain for all parties. Given the problems between Erbil and Baghdad, we can say we have come a long way. What we have seen this time in Baghdad is a desire by the Iraqi Prime Minister to tackle these problems. This encourages us to move forward faster. As I said, our priority is to address and resolve our problems with Baghdad.” And also KRG Deputy Prime Minister Qubad Talabani agreed that “the agreement reached between the Federal Government of Iraq and the Kurdistan Regional Government works in favor of all sides and I believe that everybody will support this agreement.”
Regarding external pressure, particularly from the United States and other parties on the KRG delegation to reach agreement with Baghdad, the Prime Minister said, “There was no pressure on us. What we have achieved was through the desire of both Baghdad and Erbil to reach a mutually satisfying agreement. The United States, United Kingdom, and the United Nations role is to encourage both sides to negotiate to reach an agreement. They did not interfere in the negotiations and did not exert any pressure, even in the organization of the meetings. As you know, Iraqi Oil Minister Dr. Adil Abdul Mehdi visited Erbil recently and met with Deputy Prime Minister Mr Qubad Talabani and I. We agreed then to visit Baghdad to begin these talks.”
Regarding the amount allocated by the Iraqi Government for the Peshmerga forces, whether it was taken from the Kurdistan Region’s portion of the federal budget, Prime Minister Barzani said, “The amount agreed for the Peshmerga forces will be from outside the Kurdistan Region’s share of the budget, meaning it will not be from the 17 percent allocated to the Kurdistan Region. They agreed the Peshmerga forces are part of the Iraqi defense system. This agreement is very important because after 11 years of negotiations Baghdad agreed to the proposal to allocate a portion of the national defense budget to the Peshmerga forces.”
Prime Minister Barzani thanked the civil servants, businessmen, and contractors in the Kurdistan Region for their patience with salary and payment delays. He said, “We have already received a payment and are receiving another one. We hope to overcome the issue of public service salaries by January.”
Regarding exporting oil from Kirkuk oilfields through the Kurdistan Region’s pipeline, the KRG Prime Minister explained that, practically speaking, Kirkuk oil can flow only through the Kurdistan Region’s pipeline. “We have agreed to export 300 thousand barrels per day. The technical process may start this week.”
Prime Minister Barzani also noted that “the process of exporting Kirkuk oil through the Region’s pipeline is in the interest of both the Kurdistan Region and Iraq.” He said the Region would not charge the Iraqi federal government for the export. The Region works within the framework of the Constitution of federal Iraq. This gives the Kurdistan Region opportunity to coordinate approaches to oil export and solve issues without stress.
Regarding the oil exported by the Kurdistan Region independently, the Prime Minister said, “We continue to export oil that we have, but we will first use it to meet the Region’s domestic fuel requirements. We will export the rest after meeting domestic demand.”
Regarding the agreement between the Kurdistan Region and Baghdad, Prime Minister Barzani explained, “The budget law is for one year. When we came from Erbil we knew that we will not resolve all issues in a meeting or two. We thought our visit called for a strategy to resolve the issues. We have now set the strategy. The agreement we have now concluded will open the door to settle all issues within six months to a year.
“What is important is that we managed to implement two important things. First, the sanctions imposed in Iraq’s general budget law on the Kurdistan Region’s share of the national budget have been removed. Second, we have reached agreement on oil export, the Kurdistan Region’s budget, and the Peshmerga forces’ budget.
“The other issues are article 140 of the Iraqi Constitution, incentives for Peshmerga forces, and other outstanding issues for which a period of time will be decided for their settlement. There will be talks also about what is owed to the Kurdistan Region from the 2014 budget, which is 16 trillion Iraqi dinars, as determined by the Iraq Ministry of Finance. All these issues cannot be solved in one meeting, more meetings are needed.”
While emphasizing that all differences cannot be solved in one visit or meeting, Prime Minister Barzani reiterated that the agreement concluded with Baghdad paves the way for resolving the issues within six months to one year.
Regarding project loans and mortgages for citizens, Prime Minister Barzani reiterated his government’s commitment to continue support for loans and mortgages.
Regarding guarantees the Iraqi Government will not cut the Kurdistan Region’s share of the national budget again, the Prime Minister explained, “There are no guarantees that the Iraqi government will not cut the Kurdistan Region’s share of the budget. We should not forget, however, that if they cut our share, we hold a key to their oil export. We do not, however, wish to talk in such language, we hope this language is over. We wish to open a new page and avoid using the language of threats.”
Regarding Peshmerga forces participating with the Iraqi army in liberating ISIS-controlled territory, the Prime Minister explained, “The Peshmerga forces are now fighting on a 1,100 kilometer-long frontline. Iraq’s Prime Minister lauded their efforts. In fighting a global terrorist organization, what the Peshmerga forces are achieving is most significant and serves the Kurdistan Region, Iraq, and the whole world.”
Regarding the Iraqi government’s commitment to implementing the agreement, the Prime Minister said, “the agreement has been approved by the Iraqi Council of Ministers and it has become a decree. The Iraqi government has expressed its support to the agreement. On our part we are implementing the agreement. In Baghdad, we observed willingness. We would like to take every opportunity to reach a solution that serves both the Kurdistan Region and Iraq. However, to what extent it will actually be implemented, we will have to see that later.”