Iraqi oil ministry says all deals must go through Baghdad, not Erbil

ERBIL, Kurdistan Region - Iraq’s oil ministry said on Friday that it welcomes doing business with American firms, but that all partnerships must go through the federal government, after the Kurdistan Regional Government (KRG) signed contracts with two energy companies in the United States.

“The Ministry has no objection to engaging with these companies,” it said in a statement, “but direct engagement with the [Kurdistan] Regional Government, independent of the Federal Government of Iraq and its official channels, violates the Iraqi Constitution and applicable laws.”

Earlier this week, the KRG signed two major contracts in Washington with US-based HKN Energy and WesternZagros, valued at a combined $110 billion over their lifetimes. The deals, championed by KRG Prime Minister Masrour Barzani, aim to develop oil and gas fields to boost electricity production and reduce power outages across the Region.

Erbil has said it did not consult with Baghdad before signing the contracts.

The Iraqi oil ministry on Tuesday said that oil is a national resource belonging to all Iraqis and reiterated its stance that any contract bypassing Baghdad is null and void under rulings by Iraq’s Federal Supreme Court.

In response, the KRG’s natural resources ministry defended the legality of the contracts, saying they are in line with the terms of existing agreements and the updates only involved changes in operating companies. “No legal dispute exists regarding them,” the ministry said.

Prime Minister Barzani echoed that defense in remarks on Thursday, saying that “these companies have been operating in Kurdistan for years… the court in Baghdad has ruled three times in favor of our contracts. The extension of their fields and operations in Kurdistan is absolutely legal.”