ERBIL, Kurdistan Region - Significant progress has been made toward securing “all” of the Kurdistan Region’s financial entitlements in the disputed 2027 budget bill, the Region’s Prime Minister Masrour Barzani said Monday, hours after meeting Iraqi Prime Minister Ali al-Zaidi.
“Appropriate mechanisms have been agreed upon, and we have a solid understanding allowing us to secure all of them [financial entitlements] in the Iraqi government's upcoming budget,” the Kurdistan Regional Government (KRG) premier stated in a recorded statement.
Barzani arrived in Baghdad earlier in the day to discuss the KRG’s share in the 2027 budget bill, a fiscal framework manifesting notable lingering issues between Erbil and Baghdad, including control over oil and border crossing revenues.
“These are encouraging developments as there has been a good mutual understanding between us and the federal government,” Prime Minister Barzani noted.
The upcoming budget bill, under intense discussion between Erbil and Baghdad since its introduction in late August, has allocated 12.7 percent of the national budget to the Kurdistan Region, conditioned on the complete handover of oil and non-oil revenues to the federal government. However, Erbil seeks to raise it to 14.1 percent, basing the portion on the 2024 population census.
In their joint statement following Monday’s meeting, Barzani and Zaidi said they discussed allocating the Region’s share in accordance with the Iraqi constitution and “in a manner that serves the interests of all components of Iraqi society.”
Their meeting also addressed “mechanisms for regulating revenues and coordinating their management” between the KRG and federal finance ministries.
Furthermore, the leaders stressed continued efforts to scale up Iraq’s total production of crude oil to seven million barrels per day [bpd] by 2030 and 10 million barrels in 2032, “including production from the Region’s fields, which amounts to approximately one million” bpd.
Reaffirming KRG’s position, Barzani said in his recorded statement that they share the “same view” to “increase of oil production throughout Iraq.”
Baghdad is seeking at least 400,000 barrels per day starting in 2027, while Erbil has proposed handing over between 250,000 and 280,000 bpd.
The draft budget bill outlines a mechanism to settle accumulated financial obligations between Erbil and Baghdad, estimated at 12.7 trillion Iraqi dinars ($8.4 billion) for the 2004–2026 period, over three years. It also addresses the Region's outstanding debts to the Trade Bank of Iraq (TBI).
Despite a 2025 agreement between the two governments to market Kurdistan Region oil through Iraq's State Oil Marketing Company (SOMO), disagreements over production volumes, payments to oil companies and revenue-sharing arrangements have continued to obstruct a lasting settlement.
