A New State Oil Company in Kurdistan

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Qubad Talabani, Deputy Prime Minister of the Kurdistan Region since 2014.

Qubad Talabani, deputy prime minister of the Kurdistan Region on Friday called for the establishment of a new state oil company with Kurds at the helm. 

Talabani told Iraqi National News Center, referring to the State Organization for Marketing of Oil (SOMO). 

“We hope to build a new oil and finance relationship with the central government, and we have faith that this will be achieved step by step until we reach the establishment of a new SOMO company in which there are Kurdish members on the Board of Directors,” 


State Organization for Marketing of Oil is the Iraqi national company responsible for marketing Iraq’s oil. It is headquartered in Baghdad.

The deputy PM, Talabani, added,

“However, we are still at the beginning and more work needs to be done to increase trust between the two parties,” 

Oil Revenue Issue

The control of oil revenue has long been a thorny issue between Erbil and Baghdad. The KRG has operated an independent oil and gas sector since 2006 and later began exporting its oil to the international market via a pipeline through Turkey in 2013.

Years of tensions over the independent oil sales came to a head in 2014 when then-PM Maliki suspended the Kurdistan Region’s share of the federal budget – leaving hundreds of thousands of public sector employees unpaid for months.

In December 2019, Baghdad agreed to send Erbil a 12.67 percent share of the federal budget in exchange for 250,000 barrels of oil per day. However, neither side fully abided by the agreement, and the federal money was frozen again.

The Kurdistan Region estimates that it has recoverable reserves of at least 45 billion barrels of oil and 5.66 trillion cubic meters of gas. (Photo: Archive)

Despite scores of meetings between Erbil and Baghdad over the last year, both governments have failed to reach a concrete deal to end the long-lasting issue. 

KRG delegations, mostly led by Talabani, have made several visits to Baghdad to return to finalize negotiations with Iraqi political parties represented in the parliament, as well as its finance committee, after not reaching a final agreement in their visit last month. 

Their last visit was on Sunday, but they returned to Kurdistan on Wednesday without coming to a fruitful end. 

Iraq’s Council of Ministers approved the 2021 budget bill on December 21, 2020. Parliament has met twice to discuss the bill but has yet to pass it. 

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