Heading a senior delegation, the Kurdistan Regional Government (KRG) prime minister Masrour Barzani on Wednesday arrived in Baghdad and met with Iraq's PM Mohammed Shia' al-Sudani to discuss key suspended issues between both governments, particularly the oil and gas.
"The meeting witnessed detailed discussions on Iraq's budget bill for this year and the need for passing it soon so that it would pave the way for implementing the strategic plans, programs and projects about services, economy, and investment," Iraqi state media reported, quoting a statement by PM Sudani's media office.
"Several suspended issues between Baghdad and Erbil, particularly issues related to the law for oil and gas and resolving them according to the Iraqi constitution," the reports added.
The Iraqi parliament is expected to discuss the country's budget bill for 2023, in which nearly 63000 graduates will be formally appointed in the Iraqi public sector. Kurds hope to get at least 14 per cent of the national budget in return for submitting their oil to Iraq's State Oil Marketing Organization (SOMO) and also submitting tax revenues from the border gates to the Iraqi finance ministry.
Drafting a thorny hydrocarbon law for Iraq is one of the top priorities of PM Sudani’s government.
In the past few years, the Iraqi government said that the KRG did not respect its promises to export oil via SOMO, consequently, Baghdad did not send a full budget to the Kurdistan region. The KRG accuses Baghdad of politicising the budget issue and not fulfilling its duties as per the yearly budget law passed by the parliament.
The Iraqi Federal Supreme Court, the highest court in the country, in mid-February ruled out the Kurdistan region's oil and gas law - passed in 2007 by the region's parliament and regulates the oil and gas sector in the region - as void.
The court also described all contracts signed between the KRG and the international oil companies for extraction and importing oil and gas from the region as 'illegal'. The KRG is obliged to carry out the decision by the court, however, it continues to export nearly 500,000 barrels of oil per day via neighbouring Turkey.
Iraqi Kurdistan started exporting its oil independently without the consent of the federal government in Baghdad in 2014.
Barzani in a tweet described his meeting with Sudani as "timely" and "productive", indicating that both sides are "on the way to cooperate in energy, security and budgetary issues."
Barzani also met with Iraq's senior officials in Baghdad, including president Abdul Latif Rashid, parliament speaker Mohammed al-Halbousi, and supreme judicial council president Faiq Zidan.
"We must solve all disputes through and by the Constitution in ways that serve the interest of all Iraqi groups. Judge Faiq Zidan of the Supreme Judicial Council and I exchanged views on how that could happen," Barzani wrote.
This is the third official visit by Barzani to Baghdad. He took office in 2018, and the mandate of his cabinet ended in late November, but the Kurdistan parliament extended the mandates for itself and the KRG until late this year.
Sudani, 52, was chosen to form the new government on 13 October following months of infighting between pro-Iran and pro-Sadr Shia factions that plunged the country into political deadlock.
The new prime minister had the backing of the "Coalition for the Administration of the State," which includes the "Coordination Framework", an alliance of powerful pro-Iran Shia factions that hold 138 out of 329 seats in parliament.
Other members include a Sunni grouping led by parliament speaker Mohammed al-Halbussi, and the two key Kurdish parties, Barzani's Kurdistan Democratic Party (KDP) and its rival the Patriotic Union of Kurdistan (PUK).
Barzani's government faces deep divisions and severe financial issues that are expected to impact the KRG's negotiations with the Iraqi government on oil and budget issues. So far, the KRG has not paid the December salary to its civil servants.
Qubad Talabani, the KRG deputy PM from the PUK and other ministers from the Kurdish ruling party did not accompany Barzani as the PUK has boycotted all KRG meetings and delegations. Thus, the Kurds lack a unified stance in their negotiations with the Iraqi government.
The row between the two Kurdish parties deepened in the aftermath of the assassination of a counter-terrorism officer.
Hawkar Abdullah Rasoul, known as Hawkar Jaff, a former colonel in the ranks of PUK's Counter-Terrorism Group (CTG), was killed in the capital city of Erbil after a sticky bomb attached to his vehicle detonated. The KDP accuses its rival party, the PUK, of being behind the killing.
Bafl Talabani, PUK's president, during an interview with Rudaw Kurdish satellite channel aired on Tuesday night, said that as a consequence of the killing arrest warrants have been issued by an Erbil court against himself and his brother, Qubad Talabani.
Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries, sits on enormous oil reserves, and revenues from the sector feed 90 per cent of the federal government budget.