The Iraqi government has revised the national budget law to guarantee payments to international oil companies working in the Kurdistan Region, Deputy Prime Minister for Energy and Oil Minister Hayan Abdul Ghani announced on Wednesday.

Speaking at the 9th Sulaimani Forum, Abdul Ghani revealed that negotiations between Baghdad and the Kurdistan Regional Government (KRG) led to the amendment, designed to cover operational costs for energy companies in the semi-autonomous region.

“The budget law has been updated specifically to facilitate payments to companies operating in the Kurdistan Region,” Abdul Ghani explained, adding that a formal letter, signed by the Iraqi finance minister, has been issued to ensure these payments. “This move has reassured producers and alleviated their concerns.”

Abdul Ghani also pointed out that oil produced in the Kurdistan Region is counted as part of Iraq’s national quota under the Organization of the Petroleum Exporting Countries (OPEC). To comply with OPEC limits, the federal government had to reduce its own production, which has negatively affected Iraq’s overall export capacity.

His comments come ahead of a high-level meeting scheduled between Baghdad and Erbil on Saturday to discuss the resumption of oil exports from the Kurdistan Region.

Exports through the Iraq-Turkiye pipeline were halted in March 2023 following an international arbitration ruling in Paris, which determined that Turkiye violated a 1973 agreement by allowing the KRG to independently export oil without Baghdad’s approval.

The stoppage blocked approximately 450,000 barrels per day of crude, cutting off the KRG’s primary revenue stream. This disruption has strained the Kurdistan Region’s finances, triggered production cuts, and increased reliance on budget transfers from the federal government.

Abdul Ghani noted that Prime Minister Mohammed Shia al-Sudani’s recent visit to the Kurdistan Region and his discussions with local officials were instrumental in accelerating the negotiations and facilitating recent agreements.