Iraq will respect profit-sharing contracts signed by the Kurdistan region with foreign oil firms, ending a long-standing dispute between the two sides, Prime Minister Nuri Al Maliki has said.

He said Baghdad finally agreed because extracting crude in Kurdistan was more difficult than southern Iraq, and added that output from the autonomous region would double to 200,000 barrels per day (bpd) by the end of the year, according to a report in our sister newspaper Gulf Daily News.

His remarks signal an end to a standoff between Baghdad and Kurdish authorities in Arbil which began after the latter stopped exporting oil in October 2009 in a row over payments.

'The oil ministry accepted these contracts because the nature of the extraction in Kurdistan is different from Basra,' he said in an interview, referring to Iraq's oil-rich southern province.

'There is a need for bigger efforts there, while in Basra it (oil) is closer to the surface.'

While Kurdistan has signed contracts with international energy companies based on profit-sharing, Baghdad prefers the use of a service fee, whereby firms are paid a fixed sum for each additional barrel of oil they extract.

The central government had repeatedly said it was opposed to the Kurds signing their own contracts, a position which Kurdish officials disregarded by making agreements with foreign firms in the aftermath of the US-led invasion of 2003.

The two fields that are currently being exploited are the Tawke field, run by Norwegian energy firm DNO which has present production of 60,000 bpd, and the Tuk Tuk field run by Turkey's Genel Enerji with output of 40,000 bpd. Deals with both firms were signed in 2004.