The Kurdistan Regional Government (KRG) will receive its full share of the Iraq budget in 2015 following disputes over payments last year, according to a Baghdad government official.

Iraq approved a 2015 budget of $102.5bn based on an average oil price of $60 a barrel throughout the year with a projected deficit of $19.1bn.

“Erbil will receive 17 per cent of the national budget in reality and not just in theory, and this order will remain even in the future,” Ahmad Chalabi, head of the Iraq parliament’s oil committee, was quoted as saying by Iraq Oil Report.

The KRG has the right to 17 per cent of the total budget as part of the constitution, but in 2014 Erbil accused Baghdad of withholding the payments.

In June, a KRG spokesman told MEED the Iraqi government owed Erbil about $7bn in government salaries, operational costs and project and development payments from the start of the year.

Amid this dispute, the KRG started its first independent crude exports, which were strongly opposed by Baghdad, but the two sides have since reached a deal whereby Erbil exports some crude under the Iraqi umbrella.

Chalabi said Iraq plans to export 550,000 barrels a day ((b/d) of crude through pipelines in Iraqi Kurdistan.

The KRG has agreed to hand Baghdad the revenues for 250,000 b/d of exports from Kurdish oil fields in exchange for its share of the budget.

Earlier in January, Iraq reported record crude production of 4 million b/d, making it the second-largest producer in oil producers group Opec after Saudi Arabia.

Follow Mark Watts on Twitter: @MEEDMark