ERBIL, Kurdistan Region - Iraq is seeking partnerships with major US energy companies to modernize its oil sector, increase oil and gas production, and diversify export routes, the Iraqi oil minister told Rudaw on Friday.
In a conversation with Rudaw's Diyar Kurda in Washington DC following the signing of several energy agreements during Iraqi Prime Minister Ali al-Zaidi's visit to the United States, Iraqi oil minister Basim Mohammed Khudair said the deals mark the beginning of deeper cooperation with international firms to fulfill Iraq’s long-term goal of achieving energy independence and eventually become a gas-exporting country.
“The aim of this visit is to create economic partnerships with major global companies. This is within the framework of the government's strategy and plan,” Khudair said, highlighting that “Creating partnerships with major American companies…. will enable Iraq to develop its oil infrastructure, increase production capacities for both oil and gas, and end the issue of flared gas.”
Khudair’s remarks come as Iraq remains heavily dependent on Iranian gas to fuel its power plants despite frequent disruptions and inconsistent supply.
Since 2018, Washington has pushed Baghdad to reduce its dependence on Iranian gas and electricity, periodically issuing sanctions waivers that allowed Iraq to continue importing Iranian energy.
Iraqi Prime Minister Ali Zaidi’s visit to Washington and subsequent energy agreements are a response to Baghdad realigning its energy policy amid renewed relations with the US and a desire to obtain alternative import routes and maintain compliance with US-imposed sanctions on Iran.
Khudair outlined how decades of conflict and instability have left Iraq’s energy infrastructure outdated, stating that cooperation with companies including Chevron, ExxonMobil, Halliburton and Schlumberger could aid in the sector’s reconstruction.
The minister also discussed a preliminary agreement with Syria involving a consortium of US and Qatari companies to develop new oil export routes. The project includes a pipeline connecting Basra to Kirkuk and Ceyhan, as well as a route from Haditha to Syria’s Baniyas port, with a future expansion toward Jordan’s Aqaba port.
“This provides Iraq with more than one lung to breathe and the capacity to export oil, ensuring economic security for Iraq in the event of any global or regional issues,” Khudair said.
Maritime restrictions and a series of subsequent blockades imposed on vessels transiting the Strait of Hormuz have affected 90% Iraq’s oil exports which rely on the Strait for passage, following the US-Iran war that began in late February.
Amid the maritime escalation, Iraqi oil exports dropped to 18.6 million barrels in March, generating about $1.96 billion in revenue, compared to more than 99 million barrels and $6.81 billion in February, according to figures provided by Baghdad’s oil ministry.
Kurdistan Region oil exports remain stalled at the Ceyhan pipeline amid outstanding disputes with Erbil, an issue Khudair said Baghdad is committed to resolving.
“We will remove all obstacles so they can implement the contract efficiently and reach the desired production capacities,” he said.
In addition to its recent tripartite agreement with US firm HKN for the Hamrin oil field in the Kurdistan Region, the minister also said Iraq is negotiating with OPEC+ to increase its export capacity while maintaining cooperation with the oil-producing group.
“The government's goal is to resolve all issues with our brothers in the Region,” he said, adding that Iraq’s oil wealth “belongs to all the people of Iraq.”
Below is the full transcript of the interview with Basim Mohammed Khudair:
Rudaw: Doctor, welcome to Rudaw.
Basim Mohammed Khudair: Welcome. Thank you to your channel for the coverage and for shedding light on this important governmental and economic visit by the government of Mr. Zaidi.
Let's begin with today. You signed a number of contracts today. What were the most important energy and oil contracts you signed, and what will they change in Iraq when you return?
The aim of this visit is to create economic partnerships with major global companies. This is within the framework of the government's strategy and plan. Iraq has suffered greatly over the past five decades due to oppressive policies and the wars imposed upon it, the last of which was the war against ISIS. Therefore, today we possess an old infrastructure and an oil industry that does not meet our aspirations. Creating partnerships with major American companies - such as Chevron, ExxonMobil, Halliburton, Schlumberger, and others - will enable Iraq to develop its oil infrastructure, increase production capacities for both oil and gas, and end the issue of flared gas. The government's goal is to achieve energy independence for industrial purposes. We have the hope, which is a legitimate right since we possess the resources, for Iraq to become a gas-exporting country. The Memoranda of Understanding (MoU) signed today are the first steps toward continuing discussions to reach final contractual procedures.
Today we saw the signing of an agreement with Syria, and before that, there were agreements with other countries. What is the significance of these agreements with Syria and other countries for Iraq? What is the content of the contract, and how will it benefit Iraqis?
Regarding export gateways, as everyone knows, the primary gateway we used to export oil through before the conflicts between the US and the Islamic Republic [of Iran] imposed [in the region] was the Strait of Hormuz. We suffered great losses and a decrease in revenue due to the instability of the Strait, through which we used to export more than 3.4 million barrels per day. We were left with the Ceyhan gateway [port], but due to the security situation and drone attacks on some companies, those companies withdrew and exports through Ceyhan stopped. The ministry's plan has long been to diversify export gateways, but due to the circumstances the country went through and financial constraints, we were unable to do so.
Today, the preliminary agreement with Syria and the consortium of American and Qatari companies - the American companies being Chevron and TI Capital, and the Qatari company being UCC - aims to create a pipeline network from Basra to Kirkuk, and from there to Ceyhan. Another branch will go from Haditha to Baniyas through Syria, with a second step toward Aqaba [port in Jordan]. This provides Iraq with more than one lung to breathe and the capacity to export oil, ensuring economic security for Iraq in the event of any global or regional issues. Therefore, this pipeline is one of the most important projects enabling Iraq to export its oil, whether at current volumes or according to the ministry's plan to increase production capacity.
You mentioned the port of Ceyhan and noted that some issues and drone attacks led to its stoppage. Do you expect the resumption of Kurdistan Region oil exports soon? What is the problem specifically? Is it the drone [attacks], issues with the pipeline or the disputes between Erbil and Baghdad that hampered oil exports?
Regarding the Kurdistan Region, the former government achieved a great milestone by signing a tripartite agreement between the federal government's Ministry of Oil, the Region’s Ministry of Natural Resources, and the companies operating in the Region. The oil would be exported through the State Organization for Marketing of Oil [SOMO], which is a major achievement. The government's goal is to resolve all issues with our brothers in the Region. Our aim is to utilize the Region's oil and gas in an ideal manner, raise production capacity, and reach high levels. We believe that the oil wealth in Basra, Baghdad, other provinces, and the Region belongs to all the people of Iraq. Every Iraqi individual should live a life that reflects this wealth which Allah has bestowed upon us, for the purpose of happiness and a standard of living.
You mentioned marketing the Kurdistan Region's oil; there is the issue of company debts. Who will pay these debts, and how will you agree with the Kurdistan Region on these matters?
Certainly, all files will be resolved in the future. Previously, we had no understanding with the companies operating in the Region, but today there are understandings and principles established within the framework of the tripartite agreement, and we are moving toward implementing them. Therefore, even the companies operating in the Region now have investment opportunities, such as the American company HKN, with whom we signed a contract for Hamrin field. The federal government, within its policies and guidelines, has no red lines. Its goal is to invest resources ideally so that Iraq becomes an attractive investment environment for all qualified international companies. The government does not view companies as mere contractors, but as partners in managing the economy and providing what Iraqis need in terms of infrastructure, services, and a prosperous life.
You mentioned HKN, which works with you and in the Kurdistan Region. Has the entry of companies that work with the Kurdistan Region made things easier for creating a better understanding towards the companies working in the Kurdistan Region?
Certainly, HKN has contracts in the Region. By signing this contract today, we support them and will remove all obstacles so they can implement the contract efficiently and reach the desired production capacities according to the contractual obligations.
Is the Iraqi government's policy for oil production based on OPEC's desires, or do you want to increase production? Also, how much are you producing now? Is it in line with OPEC?
We believe that OPEC provides us with prices and a stable environment for selling oil. We are in dialogue with OPEC. Due to Iraq's circumstances and the stages it has passed through, our partners in OPEC+ must understand that Iraq's situation regarding export quotas must be taken into consideration. The government, through the Ministry of Oil and diplomatic channels, is in talks to increase Iraq's export capacity, and this is a legitimate right. However, for us, OPEC remains the organization that ensures oil is sold at prices that benefit Iraq and all OPEC member countries.
I will conclude with two more questions. If the agreement with Syria is implemented, will you stop relying entirely on the Strait of Hormuz, or is this agreement a temporary measure until the Strait of Hormuz reopens completely?
Regarding the MoU with our Syrian brothers, our oil agreements are not for one or two years; they are long-term agreements. The Haditha-Baniyas pipeline project we have planned will extend for decades, not just a year or two. It does not [merely] depend on the Strait of Hormuz; rather, this is our old plan that relies on the government's strategy.
My last question, the Kurdistan Region [currently] does not have a Minister of Natural Resources. How is your relationship with the Kurdistan Region, and what are your expectations for the future of those relations in the oil and gas sector?
From my perspective as the Minister of Oil in the current administration and as a Deputy Minister in the previous one, we see the Region as an inseparable part of Iraq. Our brothers in the Region are our partners, and we must reach an agreement regardless of the disputes, especially since the wealth belongs to everyone. We must all provide a positive environment for dialogue to reach an agreement. We have signed the tripartite agreement, and I believe the other matters are simple, and an agreement can be reached that satisfies both sides.
I will add this to your positive remarks. Are you ready to help the Kurdistan Region defend the fields against the attacks they face, similar to attacks in the past?
In any crisis that occurs in Kurdistan, contact is made with the Acting Minister [of Natural Resources], Dr. Kamal, and we offer our support. We are ready because any damage in the Kurdistan Region is damage to the Iraqi oil industry as a whole. Therefore, incidents that occur outside the government's control sadden us. The government has decisive measures against anyone proven to be involved in harming these facilities, because these facilities do not belong to a specific government or individual; they belong to all the people of Iraq.
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