(Bloomberg) -- A crucial oil pipeline that’s been shut for almost 10 months is being held up further by disagreements with producers over payments, Iraqi Prime Minister Mohammed Shia Al-Sudani said. 

Renumeration for costs is the latest issue to have hit the northern-Iraq-to-Turkey pipeline, whose closure has resulted in almost $1 billion of lost revenue each month for the semi-autonomous Kurdistan Regional Government and companies operating in the area. The shutdown has kept almost half a million barrels of crude daily from global markets at a time of plentiful supply from elsewhere.

The oil companies “have an issue with the cost of producing barrels,” Al-Sudani said in an interview Tuesday in Davos at the World Economic Forum. It’s under discussion but there’s no specific solution yet, he said.

Turkey shut the pipeline in March after an arbitration court ordered it to pay Iraq $1.5 billion in compensation for transporting oil through the link without Baghdad’s approval. Ankara, which had claimed the pipe was closed because it needed repairs after two massive earthquakes in February, said in October that it was ready for operations and it was up to Iraq to resume flows. 

But progress has been slow. The lower supply, however, has been helping Iraq get closer to its OPEC+ production limits. The country has a patchy track record on implementation of the quota amid pressing financial needs, and will have to cut output by about 300,000 barrels a day to meet its new target for January.

Baghdad has asked Kurdistan to reduce output further to meet its OPEC+ limits, Argus reported this week. Lower production from the semi-autonomous north would allow fields controlled by the federal government elsewhere to maintain supply.

The Association of the Petroleum Industry of Kurdistan “shares the same goal as the government of Iraq and Kurdistan Regional Government leaders to resume exports” through the pipeline, a spokesman said in a text message. Several members of the group representing the companies were present at recent talks in Baghdad, he said. 

Oil companies in Kurdistan said in December they were ready to discuss the return of supplies through the pipeline. They currently have production contracts with Kurdistan, which Baghdad doesn’t recognize because it argues the KRG doesn’t have the rights to the oil. 

Al-Sudani said last month that the federal government was studying a change to its budget that would enable it to pay international oil companies working in Kurdistan.

--With assistance from Khalid Al-Ansary.

(Updates with comments from oil producers’ group in the seventh paragraph.)

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