Iraq’s Federal Supreme Court dismissed on Tuesday a lawsuit by President Abdul Latif Rashid against Prime Minister Mohammed Shia Al Sudani and Finance Minister Taif Sami Mohammed, over delays in paying civil servants in the country's semi-autonomous Kurdish region.
Mr Rashid had asked the court to issue an order to ensure the region’s employees are “paid continuously and on time”, arguing that “technical issues should not delay” the salaries of public workers.
Since the 2003 US-led invasion that toppled Saddam Hussein and helped the Kurds gain official semi-autonomy, the Kurdistan Regional Government has been at loggerheads with the federal government over issues including energy deals the regional government signed unilaterally and its share of the federal budget.
The semi-autonomous Kurdish region's oil sector suffered a major blow in early 2022 when the Federal Supreme Court ruled that the region's law regulating the industry was unconstitutional. The court demanded it hand over all of the oil sector’s activities to Baghdad – including exports.
A 2023 arbitration ruling forced the region's exports through Turkey to halt, cutting off a major source of revenue for Erbil and leaving it struggling to fulfil salary payments.
Baghdad and Erbil have agreed on a temporary mechanism of sending loans to pay civil servants and social services as a way to tackle the budget allocation issue. This stipulates that the region is entitled to its share only when it hands over 400,000 barrels of oil a day to Baghdad.
In an effort to unblock northern oil exports, Parliament approved this month a budget amendment to subsidise production costs for international oil companies operating in the region. The amendment sets the rate at $16 a barrel, up from an earlier proposal for $7.90 a barrel for transport and production costs, which was rejected as too low by the Kurdistan Regional Government.
Iraq’s Oil Ministry, in co-ordination with the region’s Ministry of Natural Resources, will appoint an international consultant within 60 days to assess fair production and transport costs, under the new deal.
Oil exports are set to resume next week at the capacity of 300,000 barrels a day, Iraq’s Oil Minister Hayan Abdel Ghani announced on Monday. It will be handed to Baghdad for export through Turkey’s port of Ceyhan, Mr Ghani said.
On Tuesday, semi-autonomous Kurdish region Prime Minister Masrour Barzani met with the Turkish Foreign Deputy Minister Berris Ekinci. They “agreed on the need” to resume oil exports through Ceyhan.
