(Bloomberg) -- Delegates from Iraqi Kurdistan expressed optimism after talks with Baghdad last week over resuming oil exports from the semi-autonomous region, but a top Kurdish official said there’s no quick resolution in sight.

Turkey halted flows through a twin pipeline in late March after an arbitration court ordered it to pay about $1.5 billion in damages to Iraq for transporting oil without Baghdad’s approval. A resumption of oil flows from Kurdistan could cushion some of the impact on markets over the cut of shipments from Iraq, a top source of crude.

The closure of the pipeline to Turkey’s Mediterranean oil terminal of Ceyhan has already cost producers and government coffers nearly $5 billion, according to Safeen Dizayee, the foreign minister of the Kurdistan Regional Government who spoke on a plane to New York on Friday, a day after Iraqi Kurdish leadership held talks in Baghdad over the dispute. 

“They had some good meetings and they came out more optimistic,” Dizayee said, adding that the sides were weighing “two ideas” that could resolve the dispute but refused to share details about the ongoing talks. “So hopefully there will be some positive development.”

Asked whether an agreement with Baghdad is imminent, the 59-year-old Dizayee said “probably no. But there was an air of optimism. We came back after midnight last night from Baghdad, we seemed to be relatively happy with the meetings, but as they say, the proof is in the pudding.”

Read more: Turkey Says Iraq Oil Pipeline ‘More or Less Ready’ After Audit

While Iraq’s semi-autonomous Kurdish region in northern Iraq has reached an initial agreement with Baghdad to restart the pipeline that moves more than 400,000 barrels a day via Turkey, several sticking points remain.

Baghdad wants oil marketing company SOMO to play a role in overseeing sales from the region, while the KRG has resisted federal controls. There’s also the issue of managing deals previously signed between the KRG and oil companies.

Read more: Turkey Seeks Iraq Revenue-Sharing Deal to Restart Oil Flows 

“Unfortunately there are some decision makers who in fact still don’t understand what federalism is,” Dizayee said. “They think it’s disintegration and they believe more in centralized authority. So that’s where we have a point of contention.”

The closure of the pipeline, meanwhile, has forced foreign oil companies working in northern Iraq to pare down operations, Dizayee said.

“All of them have slowed down their work because they’re not getting any fees for their operation cost,” Dizayee said. “They’ve been very patient with us. We are not able to pay them. But they’re still there.”

Under the Iraqi constitution, the central government is required to share 12.67% of the overall oil income with the semi-autonomous Kurdish region. With no recent payments, the KRG was unable to pay about 700,000 workers and 500,000 others who receive social aid from the Kurdish government. 

Turkey has made clear that it has no intention of paying the $1.5 billion fine and has asked the Kurds to pay it to Baghdad, as they were the benefactors, Turkish officials who spoke on condition of anonymity have previously said.

“Turkey doesn’t want to pay for many reasons but at the end of the day there has to be a joint resolution,” Dizayee said. “There’s an agreement with Turkey. So every side has to take a responsibility. We are not ready to pay either, we don’t have the money to pay.”

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