The KRG Ministry of Natural Resources announced that it has finalized an agreement with Iraq’s Ministry of Oil on resuming Kurdistan Region oil exports.

Context: Under the deal, the KRG will hand over all produced oil—except for 50,000 barrels per day reserved for local consumption—to Iraq’s SOMO. The ministry added that the only remaining step is for Iraq to conclude talks with Turkey to prepare the pipeline for export resumption. However, both the Iraqi Oil Ministry and SOMO have said that the KRG has not handed over its oil, and they are ready to take it and restart exports.

Analysis: Over the past three weeks, the PUK has escalated its rhetoric against the KRG as negotiations slowed, seeking to pressure for a deal. The PUK has a vested interest in seeing the agreement finalized.

Talks with international oil companies, however, remain unfinished. The companies are engaged in parallel negotiations—one track with the KRG and another with Iraq’s Ministry of Oil. While some points have been agreed upon, others remain unresolved. One recent agreement with the KRG allows the $16 per barrel allocated for production from certain oilfields with lower costs to be redirected toward higher-cost fields. For example, production in Khurmala costs less than $8 per barrel, while in the Sarsang and Sheikhan fields, costs exceed $20.

This arrangement is meant to bridge the period until a neutral international consultancy—reportedly Wood Mackenzie—begins a 60-day review to assess production costs in each field. During this interim, if the Ministry of Oil makes initial payments to the companies, those funds will be distributed according to this cost-balancing approach.

The companies are also seeking guarantees that, if relations between Erbil and Baghdad break down, their operations will continue and the Ministry of Oil will maintain payments. The framework requires all three parties to cooperate: the Ministry of Oil pays the companies, the companies produce oil, and the KRG hands over oil and non-oil revenues to Iraq. If any party disrupts the process, the deal could collapse—hence the companies’ push for assurances.

The issue of the KRG’s outstanding debt to the companies—estimated at around $1 billion—also remains unresolved. There have been proposals to repay the debt in oil, but no final agreement has been reached.

Additionally, the companies want a dedicated bank account for their payments to safeguard funds, but this issue remains unresolved.