ISTANBUL — Iraq’s new oil minister, Adel Abdul Mahdi, conceded at an energy summit here on Nov. 19 that he inherited a depleted budget and that the central government now values an oil pipeline from the Kurdish area of Iraq to Turkey whose construction Baghdad once bitterly opposed.

Mahdi answered questions from Al-Monitor in a brief interview a day after Baghdad transferred $500 million to the Kurdistan Regional Government (KRG) in return for the KRG starting to pump 150,000 barrels a day of Kurdish oil into the Iraqi state petroleum company’s storage tanks at Ceyhan, Turkey.

In the past, Baghdad vehemently objected to the Iraqi Kurds exporting oil through Turkey and withheld the 17% of Iraqi oil revenues it was supposed to provide to pay the salaries of KRG employees. However, that was before the ouster of former Iraqi Prime Minister Nouri al-Maliki and his replacement by a more inclusive politician, Haider al-Abadi, in the wake of the rapid advance of the group that calls itself the Islamic State (IS) deep into western Iraq. Now Baghdad and Erbil appear to be serious about completing a long-stalled hydrocarbon law and increasing production and exports from both the Kurdish area and the rest of Iraq not under IS control.

While Mahdi noted that Iraq is still producing 3.2 million barrels a day from oil fields in the south, he said, “we hope Kurdistan can produce more” and add to the 300,000 barrels a day it is currently exporting.