Kurdistan will open an account with Turkey’s state-owned Halkbank to deposit payments for its oil and gas exports, the Kurdish government says.

The Kurdish regional government in northern Iraq announced on Friday that payments for oil that goes through Turkey’s Ceyhan pipeline will be deposited to Turkish state-owned lender Halkbank.

The funds would be treated as part of the Kurdish government’s budget according to the Iraqi constitution, the government said in a statement.

Saying that a tanker loaded with over one million barrels of crude oil departed last night from Ceyhan towards Europe, the statement said, "This is the first of many such sales of oil exported through the newly constructed pipeline in the Kurdistan region."

"Meeting Iraq’s continued international UN obligations, five percent of the sales revenue will be set aside in a separate account for reparations," the regional government added.

Hawar Abdulrazaq