ERBIL, Kurdistan Region - Iraq's state-run North Oil Company on Tuesday signed an initial agreement with US-based HKN Energy for the development of the Hamrin oil field in Basra province, just hours after a drone strike targeted one of HKN’s oil fields in the Kurdistan Region.
The agreement, signed under supervision of Iraqi Oil Minister Hayyan Abdul Ghani, aims to raise Hamrin’s output to 60,000 barrels per day (bpd), up from its current 20,000 to 25,000 bpd. It also includes plans to invest 45 to 50 million cubic meters of associated gas to fuel power stations, according to a statement from the oil ministry.
Abdul Ghani reaffirmed the ministry’s “commitment to cooperating with reputable American and Western companies” to enhance production capacity and support Iraq’s economy. He added that negotiations are underway with other firms to expand investment in oil, gas, and energy.
The oil ministry cited HKN Vice President Matthew Zais as saying that the company is “very proud to work and cooperate with the Ministry of Oil,” aiming to develop the field to its full capacity while utilizing Iraqi capabilities for 80 percent of operations and supporting local communities.
The signing ceremony was attended by US charge d’affaires Steven Fagin, who welcomed the deal and expressed hopes for more American investment in Iraq. “We are pleased to attend today's signing ceremony at the Iraqi Ministry of Oil,” Fagin was quoted by the ministry as saying. “We would like to see much more business with Iraq.”
According to the statement, Amer Khalil Ahmed, head of the North Oil Company said that agreement lays the foundation for a development contract that will cover well expansion, staff training, and securing gas for power generation.
Iraqi Prime Minister Mohammed Shia’ al-Sudani also received Zais and Fagin on Tuesday, expressing the government’s vision of increasing both oil output and associated gas investments.
The agreement comes hours after an early morning explosion was reported at the Sarsang oil field in Duhok province, operated by HKN Energy. The company did not report any casualties, with staff reporting a drone strike. HKN holds a 62 percent stake in the field.
Baghdad’s finance ministry in late May suspended budget transfers to the Kurdistan Regional Government (KRG) for the rest of the year, claiming Erbil had already received its full 2025 allocation and failed to hand over agreed oil and non-oil revenues. The Kurdistan Region’s Finance Minister Awat Sheikh Janab dismissed the justification as “laughable.”
HKN and WesternZagros signed two major oil and gas deals in May worth $110 billion over their lifespan in the Kurdistan Region, prompting a lawsuit from the federal oil ministry. At the time, Zais criticized Baghdad’s legal action and warned it could undermine efforts to resume Kurdish oil exports.
The Iraqi oil ministry claimed the contracts violated federal court rulings and the Iraqi constitution, while the KRG defended them as extensions of existing contracts that benefit all of Iraq.
Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline have been halted since March 2023 when a Paris-based arbitration court ruled in favor of Baghdad against Ankara, saying the latter had violated a 1973 pipeline agreement by allowing Erbil to begin exporting oil independently in 2014.
During his meeting with Zais and Fagin on Tuesday, Sudani reaffirmed his government’s "ongoing efforts” to resume the exportation of oil to Turkey.
CORRECTOIN: A previous version of this reported that Hamrin oil field is located in Basra province.
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