Shafaq News- Baghdad/ Erbil

Baghdad and Erbil have agreed to pause negotiations on payments owed to oil companies in the Kurdistan Region of Iraq until regional tensions ease, a source told Shafaq News on Saturday.

The two governments will hold off on new arrangements with producers while focusing on managing the impact of the conflict. The dispute centers on production and transport costs, crude marketing through Iraq’s state marketer SOMO, and guarantees for settling accumulated dues.

Both sides, the source said, also plan to review costs related to field rehabilitation and output by foreign operators, aiming to ease pressure on the state budget while safeguarding company entitlements in line with international pricing standards.

Outstanding payments are estimated at around $1 billion, including roughly $300 million claimed by Norway’s DNO, leaving the issue unresolved despite earlier efforts to restore exports.

In April 2025, Oil Minister Hayan Abdul Ghani indicated that Baghdad secured a commitment from the Finance Ministry to settle dues as part of steps to rebuild confidence.

Since the escalation that began on Feb. 28, when Iran closed the Strait of Hormuz amid the US-Israeli war, Baghdad and Erbil have moved toward emergency arrangements to resume Kirkuk oil flows via Turkiye’s Ceyhan port, including forming a joint committee and introducing measures to protect fields and export routes.

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