Budget battle over Kurdistan exports

The fledgling oil cooperation between Baghdad and the semi-autonomous Kurdistan region has entered a new phase of political negotiation, as leaders are working to enshrine a tentative export agreement in the 2013 federal budget.

Both sides have failed to meet certain provisions of the deal, which has led to newly sustained Kurdish exports and a $541 million payment from Baghdad to Erbil. The Kurdistan Regional Government (KRG) has not increased exports to 200,000 barrels per day (bpd), while Baghdad, three weeks late in making a first payment, has not made a required follow-up payment of $292 million, which will likely be delayed until next year.