Baghdad Challenges Kurdistan’s Gas Contracts with American Companies

The Iraqi federal government initiates legal proceedings against the autonomous region of Kurdistan regarding gas contracts signed with American companies, while Washington reaffirms its support for these strategic energy agreements.

Share:

The autonomous region of Iraqi Kurdistan recently signed two major agreements with American firms WesternZagros and HKN Energy, during an official visit to Washington by the Kurdish Prime Minister, Masrour Barzani. These contracts involve the exploitation of extensive gas and oil reserves located within the Kurdish region, representing potential investments worth tens of billions of dollars. However, Baghdad maintains that these agreements violate Iraq’s national energy sovereignty, thereby reigniting longstanding tensions between the central government and Erbil.

Baghdad’s Legal Action

Reacting swiftly to these announcements, the Iraqi government has filed a lawsuit with the al-Karkh Commercial Court in Baghdad to legally invalidate the contracts signed by the autonomous Kurdish region. The Iraqi Ministry of Oil asserts that these contracts contravene the federal constitution, which stipulates that the management and exploitation of oil and gas resources fall exclusively under the authority of the central government.

More specifically, Iraqi authorities are contesting a contract with WesternZagros for the exploitation of the Topkhana block, which, combined with the adjacent Kurdamir block, contains approximately 5 trillion cubic feet of natural gas and 900 million barrels of crude oil. The second agreement, reached with HKN Energy, aims to develop the Miran gas field, estimated at nearly 8 trillion cubic feet of natural gas. The cumulative economic potential of these two agreements could reach around 110 billion dollars over their lifespan.

United States Position

In response to this legal action, the United States has publicly expressed support for the agreements reached between the American firms and the Kurdish regional government. The spokesperson for the U.S. State Department, Tammy Bruce, has called upon Baghdad and Erbil to cooperate in order to swiftly increase Iraq’s domestic natural gas production. According to her, these economic partnerships benefit both American interests and Iraq’s energy independence and prosperity.

American diplomacy emphasizes the necessity of a strong and economically resilient Kurdish region within a stable federal Iraq, safeguarding strategic interests of both nations in the Middle East. Thus, Washington openly favors enhanced cooperation over continued judicial and political tensions.

A Longstanding Conflict Rekindled

Tensions surrounding resource management between Baghdad and the Kurdish autonomous region are far from new. For several years, Kurdistan exported its oil directly via Turkey, using the Ceyhan oil terminal, without prior approval from the Iraqi central government. However, international arbitration favoring Baghdad had halted these exports, compelling Kurdistan to redirect its sales through Iraq’s national oil company.

Despite these previous judicial rulings, the Kurdistan regional government defends the full legality of the new contracts, asserting they contain no legal weaknesses and comply with standardized international practices. Furthermore, Erbil highlights that the involved companies already have extensive experience exploiting regional resources.

Naftogaz announces the launch of a natural gas well with a daily output of 383,000 cubic meters, amid a sharp decline in Ukrainian production following several military strikes on its strategic facilities.
Sonatrach and ENI have signed a $1.35 billion production-sharing agreement aiming to extract 415 million barrels of hydrocarbons in Algeria's Berkine basin, strengthening energy ties between Algiers and Rome.
Maple Creek Energy is soliciting proposals for its advanced 1,300 MW gas project in MISO Zone 6, targeting long-term contracts and strategic co-location partnerships with accelerated connection to the regional power grid.
VMOS signs a USD 2 billion loan to finance the construction of the Vaca Muerta South pipeline, aiming to boost Argentina's energy production while reducing costly natural gas imports.
According to a Wood Mackenzie report, Argentina could achieve daily gas production of 180 million cubic metres per day by 2040, aiming to become a key regional supplier and a significant exporter of liquefied natural gas.
Côte d'Ivoire and the Italian group Eni assess progress on the Baleine energy project, whose third phase plans a daily production of 150,000 barrels of oil and 200 million cubic feet of gas for the Ivorian domestic market.
The extreme heatwave in China has led to a dramatic rise in electricity consumption, while Asia records a significant drop in liquefied natural gas imports amid a tight global energy context.
E.ON, together with MM Neuss, commissions Europe’s first fully automated cogeneration plant, capable of achieving a 91 % fuel-use rate and cutting CO₂ emissions by 22 000 t a year.
Facing the lowest temperatures recorded in 30 years, the Argentine government announces reductions in natural gas supply to industries to meet the exceptional rise in residential energy demand across the country.
Solar power generation increased sharply in the United States in June, significantly reducing natural gas consumption in the power sector, despite relatively stable overall electricity demand.
Golden Pass LNG, jointly owned by Exxon Mobil and QatarEnergy, has asked US authorities for permission to re-export liquefied natural gas starting October 1, anticipating the imminent launch of its operations in Texas.
Delfin Midstream reserves gas turbine manufacturing capacity with Siemens Energy and initiates an early works programme with Samsung Heavy Industries, ahead of its anticipated final investment decision in the autumn.
Norwegian group DNO ASA signs gas offtake contract with ENGIE and secures USD 500 million financing from a major US bank to guarantee future revenues from its Norwegian gas production.
Golar LNG Limited has completed a private placement of $575mn in convertible bonds due in 2030, using part of the proceeds to repurchase and cancel 2.5 million of its own common shares, thus reducing its share capital.
Shell Canada Energy announces shipment of the first liquefied natural gas cargo from its LNG Canada complex, located in Kitimat, British Columbia, primarily targeting fast-growing Asian economic and energy markets.
The Australian government is considering the establishment of an east coast gas reservation as part of a sweeping review of market rules to ensure supply, with risks of shortages signalled by 2028.
The increase in oil drilling, deepwater exploration, and chemical advances are expected to raise the global drilling fluids market to $10.7bn by 2032, according to Meticulous Research.
Enbridge Gas Ohio is assessing its legal options following the Ohio regulator's decision to cut its revenues, citing potential threats to investment and future customer costs.
The small-scale liquefied natural gas market is forecast to grow at an annual rate of 7.5%, reaching an estimated total value of $31.78bn by 2030, driven particularly by maritime and heavy-duty road transport sectors.
The European Union extends gas storage regulations by two years, requiring member states to maintain a minimum fill rate of 90% to ensure energy security and economic stability amid market uncertainties.