“The federal government sees that this needs to be resolved transparently and clearly,” Mahdi Allaq, secretary of Iraq’s Council of Ministers, told Rudaw, explaining that serious discussions on oil need to happen quickly.
Control over oil reserves and revenues is a contentious issue between Erbil and Baghdad.
When Erbil announced plans to sell oil independently of Baghdad in 2014, then-prime minister Nouri al-Maliki stopped sending the KRG its share of the federal budget.
The federal budget law, which was passed last month despite objections from Kurdish lawmakers, stipulates that the KRG will sell oil from its fields through the state-owned marketing company SOMO to cover half of its expenses, while Baghdad will send funds to cover the other half.
The two governments also need to hammer out an agreement with respect to oil from disputed Kirkuk province.
One possibility that has been discussed is for Baghdad to export Kirkuk’s oil through the KRG’s pipeline to Turkey’s Ceyhan port, with the condition that the federal government gives a share of revenues to the KRG and takes on responsibility for paying the owners of the pipeline for its use – including Rosneft, which owns the majority share of the pipeline within the Kurdistan Region.
Both sides spoke optimistically about improving relations ahead of next week’s meeting.
"The situation is improving with Baghdad. Discussions are continuous," said Fuad Hussein, chief of staff of the KRG’s presidency.
A number of meetings between KRG Prime Minister Nechirvan Barzani and Iraqi Prime Minister Haider al-Abadi has helped to thaw tensions and resulted in Baghdad sending funds for salaries and reopening the airports.
Allaq said that “positive results” have been reached in some areas and talks are ongoing in other areas. Iraqi teams are still busy auditing the KRG’s payroll, he added, explaining that this is a matter Abadi wants resolved.
