Ghadhban said on Thursday, April 25, that studies were being carried out to increase production capacity from the Kirkuk oilfields by 50 percent from current levels, Reuters reported.

Relations between the federal government and the KRG have been tense over the last five years, not least because of disagreements over oil revenue and exports.

A revenue-sharing deal struck between Baghdad and Erbil in December 2014 collapsed after the KRG stopped transferring oil to the federal State Organization for Marketing of Oil (SOMO) and began trying to sell oil on international markets.

Baghdad in turn stopped sending budget payments to Erbil.

The Council of Representatives passed the 2019 federal budget law in January, which included several measures designed to normalize and improve relations between Erbil and Baghdad.

Under the terms of the law, the Kurdistan Region would receive 12.67 percent of the budget. In return, Erbil is required to transfer 250,000 barrels of oil per day to SOMO and implement a number of transparency measures.

Currently, Erbil is not making the oil transfers, claiming that it has a number of obligations to fulfill from preexisting contracts.

Prime Minister Adil Abdul Mahdi, whose government has prioritized improving relations with the KRG, has so far been tolerant of that justification.

But it has caused consternation in Baghdad, with some politicians complaining that they are nevertheless required to send money to the Region.

The talks are likely an effort to resolve the disagreement and resume transfers to SOMO.

Ghadhban also said that Iraq has the capacity to increase its oil production to 6 million barrels per day if needed, but it was committed to OPEC-led output cuts and would not take unilateral action to boost supply.

He added that there were no acute oil shortages for the time being, but Iraq would continue to monitor the market to assess the need for additional barrels at the next OPEC meeting, according to Reuters.

On Monday, the United States decided not to renew exemptions from sanctions against Iran granted last year to buyers of Iranian oil, taking a tougher line than expected and triggering a rally in oil prices on fears of oil supply shortages.

Reporter’s code: 50101