GOI pays Kurds $427 million as part of deal to solve oil conflict

December 12, 2011

The government has transferred $427 to Iraqi Kurds as part of an agreement to settle differences over the development of oil fields, said Finance Minister Rafie al-Essawi.

The sum will be used to cover expenses foreign companies have incurred in the development and production of oil in the Kurdish regime, the minister said.

The Kurds had struck several deals with foreign firms to develop oil fields in within their autonomous region comprising the three provinces of Arbil, Dahouk and Sulaimaniya.

Baghdad had declared the deals void and null and refused to carry oil produced in the Kurdish region in its pipelines for exports.

But the sides eventually came to terms under which the central government will pay what the Kurds say they have spent on their deals as well as the sums foreign firms are entitled to under those deals.

Under the pact revenues from oil exports originating in the Kurdish region will go directly to central government coffers.

The Kurds are entitled to 17% of the hard cash the country earns for its oil exports.