Arbil, Iraq - The prime minister of northern Iraq's autonomous Kurdish region on Wednesday blasted the Iraqi petroleum minister for his "failed" policies.

Speaking to reporters at the airport in the northern Iraqi city of Arbil on Wednesday on his return from Baghdad, Nechirvan Barzani, prime minister of the semi-autonomous Iraqi Kurdistan Region, said Iraqi Petroleum Minister Hussein al-Shahristani's "failed policies" were responsible for the problems in the Iraqi oil sector.

"Al-Shahristani's policies are failed policies, and it is because of them that Iraq has lagged behind" in developing its oil production, Barzani said.

In an interview published Tuesday in the London-based Arabic daily al-Sharq al-Awsat, al-Shahristani said Iraq needed to invest 50 billion US dollars to improve the country's oil infrastructure, but that the funds were not available because the money was needed to improve the country's electric and water grid.

Iraq, which relies on oil for 90 per cent of its revenues, has been badly hit by the drop in oil prices. In recent weeks, the price of crude has dropped to around 50 dollars a barrel from a peak of 147 dollars a barrel last July.

Control of Iraq's oil resources, particularly in the oil rich and ethnically divided city of Kirkuk, has been a source of friction between Baghdad and the Kurdish government in northern Iraq.

Many Iraqi Kurds hope to make Kirkuk, with its rich oil reserves, the future capital of an independent Kurdish state. Baghdad views the city, and its resources, as an integral part of Iraq.

Saddam Hussein's government in the 1970s attempted to "Arabise" the region by moving Iraqis from elsewhere in the country to the city and forcing Kurds to leave.

Barzani on Wednesday said he and al-Maliki had agreed "on a return to normalcy" in relations between Baghdad and the semi-autonomous Kurdish region of northern Iraq.

"We are awaiting the arrival of a delegation from Baghdad to the Kurdish region soon to resolve all differences," Barzani said, adding that the problems must be solved through dialogue and debate between two equal partners.

The Kurdish prime minister further reiterated his calls for a peaceful solution to the conflict between militants from the separatist Kurdistan Workers' Party (PKK) holed up in the mountains of northern Iraq.

"The (Kurdish) government is opposed to any armed group's launching attacks on neighbouring countries," Barzani told reporters. "We believe that this issue will be resolved only through political means. There is no military solution to this conflict."

Toward that end, he called on Turkey to stop bombarding the mountains of northern Iraq in its campaign to root out PKK fighters taking refuge there.

The PKK on Tuesday rejected calls from Iraqi President Jalal Talabani, himself an ethnic Kurd, to lay down its arms or leave the country.

"The constitution prohibits the presence of armed groups on Iraqi soil, including the PKK," Talabani told reporters at a joint news conference with Turkish President Abdullah Gul in Baghdad on Monday. "Either they will put down their weapons, or they will leave our soil." (dpa)