<article><p>Talks stalled over the weekend between Iraq's central government and the Kurdistan Regional Government (KRG) over finalising a deal on oil revenue sharing. </p><p>The KRG said Baghdad was unable to pay the semi-autonomous region's 17pc share of the federal budget because of financial constraints. </p><p>"During the meeting, it became apparent that due to the financial crisis in Iraq and the lack of liquidity, the Iraqi government is unable to pay the Kurdistan Region's share of January and February from the federal budget," the KRG said in a statement today. </p><p>But both sides reaffirmed their commitment to the deal reached last December and will hold future talks "to find an appropriate solution to the situation," the statement said. </p><p>The breakthrough accord signed on 2 December stipulated the KRG will boost the amount of crude it exports through Iraqi state-owned oil marketer Somo to 250,000 b/d from the 150,000 b/d agreed in November, with all the crude coming from fields under KRG control. The deal also allows Baghdad to export 300,000 b/d through the KRG pipeline system to Turkey's Mediterranean port of Ceyhan, without paying a transit fee. In return, Baghdad will release the KRG's 17pc share of total Iraqi oil revenues.</p><p>Delays in payments from Baghdad will come as unwelcome news for the KRG's foreign operators, already worried that falling oil prices will make it harder for them to recover costs and receive payments from Erbil. In December, KRG oil minister Ashti Hawrami said the KRG is committed to paying foreign oil firms, but admitted that, until a comprehensive agreement is reached with Baghdad, the KRG "will have limited capacity" to fulfil its promise.</p><p>And some foreign companies have begun switching away from pipeline exports for which they were not being paid and back towards sales into the domestic market.</p><p>The KRG said its delegation presented a timetable for KRG crude exports to the federal government, which was approved by Baghdad.</p><div id="article-footer"><p><br> Send comments to <a href="mailto:feedback@argusmedia.com" target="_parent"> feedback@argusmedia.com </a></p><p><u><a href="http://www.argusmedia.com/Info/General/News" target="_TOP"> Request more information </a></u> about Argus' energy and commodity news, data and analysis services. </p><p><i> Copyright © 2015 Argus Media Ltd - <a href="http://www.argusmedia.com/" target="_TOP"> www.argusmedia.com </a> - All rights reserved. </i></p></div></article>
