The Kurdistan Government’s recent energy agreements with US companies HKN Energy and WesternZagros, worth $110bn (ID143.59trn) over their lifetime, have been declared “null and void” by Iraq’s Oil Ministry, according to a Reuters report.
The announcement intensifies a long-standing dispute over regional resource control and persistent tensions between Iraq and the semi-autonomous Kurdistan region of Iraq.
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Announced by Kurdistan Region Prime Minister Masrour Barzani during a speech in Washington, the deals involve the development of the Miran and Topkhana-Kurdamir gas fields in Sulaimaniya, northern Iraq.
The Kurdistan Government had expressed its commitment to the energy sector’s development, with Barzani stating: “Our reforms represent a significant step towards securing round-the-clock electricity supplies for all residents.”
However, the Iraqi Oil Ministry has swiftly opposed the deals, stating: “These contracts are null and void. Natural resources belong to all Iraqis, and any agreement to invest in them must be made through the federal government, not in defiance of the law and the constitution.”
In 2022, Iraq’s federal court ruled that an oil and gas law regulating the industry in Iraqi Kurdistan was unconstitutional, demanding that Kurdish authorities hand over their crude oil supplies.
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By GlobalDataDespite this, the Kurdish region’s Ministry of Natural Resources has defended its right to sign the energy deals, arguing: “These deals are based on contracts signed many years ago, which have also been upheld as legal and valid by Iraqi courts.”
An Oil Ministry official highlighted that the agreements signed in Washington were made without Iraq’s prior knowledge, further complicating relations and affecting efforts to resume the export of Kurdistan regional oil.
The halted exports are linked to a pipeline running through Turkey, which ceased operations in March 2023 following a ruling by the International Chamber of Commerce against Ankara for facilitating Kurdish exports without Iraq’s consent.
Negotiations to resume Kurdish oil exports via the Iraq-Turkey pipeline, which once handled around 0.5% of the global oil supply, have been stalled over payment terms and contract details.
Foreign energy companies have called for clarity on debt repayment accumulated between 2022 and 2023 and have sought contract guarantees.
