The Iraqi and Kurdish governments reached a deal Tuesday that resolves a year long fight over Kurdistan’s oil exports and federal budget earnings.
Kurdistan, a semi-autonomous region in northern Iraq, will now deliver 550,000 barrels of oil per day to Iraq’s oil ministry.
In turn, the Iraqi federal government will pay Kurdistan its 17 percent share of the national budget worth about $12 billion, BBC said.
Kurdistan will also receive a $1 billion payment to help equip and pay Kurdish Peshmerga troops working with the Iraqi army to push Islamic State militants out of the country.
Iraq’s Kurdish finance and deputy prime minister Hoshyar Zebari told the AP the deal is a “win-win” for both sides.
The dispute reached all the way to the shores of Texas earlier this year when U.S. Marshals were ordered to seize one million barrels of Kurdish oil from a tanker in July.
The Iraqi government claimed the oil was illegally exported and threatened to sue any ship-to-ship transportation company that attempted to unload the tanker.
A federal judge lifted the seizure order in August but the dispute has not been settled yet.