KRG and US State Department welcome new gas deals

ERBIL — The Kurdistan Regional Government signed two multi-billion-dollar gas development agreements with U.S. oil companies HKN Energy and WesternZagros on May 19 in Washington, drawing praise from U.S. officials but prompting sharp legal objections from Baghdad.

KRG Prime Minister Masrour Barzani oversaw the signing ceremony at the U.S. Chamber of Commerce, hailing the deals as a milestone in the Region’s efforts to modernize its energy sector and deliver uninterrupted electricity.

“These two agreements will contribute to the further development of the Kurdistan Region’s economy,” Barzani said. “HKN and WesternZagros have worked in the Kurdistan Region for many years and played a productive role in serving the people of Kurdistan and Iraq.”

The agreements focus on expanding natural gas production in the Miran and Topkhana-Kurdamir fields in Sulaymaniyah governorate. Kurdish officials say the projects aim to boost power generation and potentially supply gas to other parts of Iraq.

But the Iraqi Ministry of Oil swiftly condemned the move, citing federal court rulings that it says prohibit independent contracts by the KRG. In a statement released May 20, the ministry said the agreements “violate Iraqi law” and are legally null. “Oil wealth belongs to all Iraqis, and any investment in this resource must be managed by the federal government,” it said.

The statement referenced rulings issued in 2012 and 2019 by Iraq’s Federal Supreme Court.

In response, the KRG’s Ministry of Natural Resources defended the deals, saying they are based on legacy contracts and that only the operators have changed. “There is no legal dispute concerning them,” the ministry said. “Both HKN and WesternZagros are longstanding producers in the Region.”

KRG officials argue the expanded gas output will fuel power plants and stabilize electricity across the country. “This is more than a business deal—it’s a continuation of shared goals,” Barzani said, referring to the U.S.-Kurdish partnership.

The U.S. State Department welcomed the announcement. “These types of partnerships will strengthen gas production in Iraq and benefit both of our peoples,” the Bureau of Near Eastern Affairs posted on X, formerly Twitter.

The dispute is the latest in a long-running conflict between Baghdad and Erbil over control of oil and gas. In March 2023, the Paris-based International Court of Arbitration ruled in Baghdad’s favor in a case involving Kurdish oil exports through Turkey, leading to a suspension of crude flows from the Kurdistan Region via the Ceyhan port.