After a month-long standoff, the KRG and federal Iraqi government this week worked out a revenue-sharing agreement that will see ID320bn ($270mn) transferred monthly from Baghdad to Erbil to cover civil servant salaries in exchange for access to customs revenues from borders under KRG control. The agreement covers salary payments for August, September and October.

Transfers to the KRG, which are a crucial revenue stream and mandated per the Iraqi constitution, were suspended in April in response to Erbil’s perennial non-compliance with its obligation to hand over 250,000 b/d of oil to Iraqi state marketer Somo (MEES, 1 May). Interestingly, reports suggest that the newest agreement – which will likely require cabinet approval from both sides – does not deal with the thorny oil question that has plagued KRG-Baghdad relations since the advent to Kurdish production. That appears to have been deferred for now, with officials to study the matter during future talks. (CONTINUED - 152 WORDS)