* Iraq oil minister says production exceeds 2.6 million bld
* Production at this level for "first time in 20 years"
* Minister confirms Kurdish exports due to resume soon
* Minister - "nothing new" regarding Kurd contracts dispute
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By Ahmed Rasheed
BAGHDAD, Dec 27 (Reuters) - Iraq's oil production currently exceeds 2.6 million barrels per day, the first time it has reached that level in 20 years, new Oil Minister Abdul Kareem Luaibi said on Monday.
Luaibi also confirmed exports from the semi-autonomous northern Kurdish region were expected to resume soon. But he said there was "nothing new" regarding a disagreement between Iraqi Kurdistan and the central government in Baghdad over contracts to develop the northern oilfields.
News reports last week had quoted Luaibi as saying Baghdad would honour the contracts, which Baghdad has repeatedly said it regards as illegal. Shares in Norwegian oil company DNO, which has such a contract, rose 9 percent on Monday after these reports..
Iraq sits upon some of the world's largest oil reserves but has struggled to push output close to the 3 million barrels per day it produced in the late 1980s, before it invaded Kuwait.
Luaibi said on Saturday that Iraq aimed to raise oil output to 3 million barrels per day by the end of 2011.
Luaibi, who was appointed to his new position last week, said on Friday that Iraq was on track to raise output capacity to 12 million bpd in six to seven years' time.
Sceptical analysts say 6-7 million bpd is a more realistic target. Reuters surveys of OPEC output found Iraq's daily output was 2.5 million barrels a year ago, but dipped in subsequent months.
On Monday, Luaibi told reporters: "Today the Iraqi production reached more than 2.6 million bpd for the first time in 20 years."
Lingering insecurity and months of political limbo have delayed much-needed upgrades to the war-ravaged country's oilfields and export pipelines.
KURDISH EXPORTS
Luaibi said Kurdish exports were expected to resume soon, but said there was no specific timeline.
Hussain al-Shahristani, Iraq's former oil minister, said earlier this month Kurdish oil was expected to flow early next year. Shahristani said the region could produce 150,000 bpd next year.
The dispute Iraqi Kurdistan and the central government over the contracts to develop the northern oilfields halted exports from the region last year.
Baghdad says contracts signed by the Kurdistan Regional Government with foreign firms to develop the oil fields in the north are illegal.
Asked about the reports that Iraq would honour contracts signed by the Kurdish regional government, Luaibi said:
"(There is) nothing new in this issue. The agreement that we reached with our brothers in Kurdistan in April was that the Kurdish Regional Government is to export all the produced quantities from the region through the Iraqi export network and the revenues will go to the federal budget," Luaibi said.
"In return for that, the government pledges to pay all the expenses and costs which were used to develop the oil field."
Before the flow was halted last year, the Kurdish region was exporting around 100,000 barrels per day.
Output from the Kurdish region is seen as a key to boosting exports, which provide Iraq with about 95 percent of its federal revenue. (Reporting by Ahmed Rasheed; Writing by Caroline Drees and Serena Chaudhry, editing by Anthony Barker)