Iraq's central government has approved payment of close to $560 million to oil producers in the autonomous Kurdish region, its finance minister said, after Kurdish authorities threatened to halt exports due to a lack of payments from Baghdad. The central government has a long-standing dispute with the Kurdish Regional Government (KRG) in the north over the control of oil in the region, which has throttled payments. Baghdad maintains it alone has the right to export oil.
On Monday, the KRG said it had reduced exports to 50,000 barrels per day (bpd) and warned it would stop them altogether if Baghdad was not forthcoming with payments, which it said amounted to around $1.5 billion. "We've allocated 650 billion Iraqi dinars ($559.4 million) in the 2012 budget to pay the companies, which we will release after we receive the audit from the board of supreme audit," Finance Minister Rafie al-Esawi told reporters on the sideline of the Arab League summit on Tuesday.