Iraq has filed a lawsuit against Kurdistan for signing billion-dollar gas contracts with US companies without federal approval, escalating a long-standing dispute over who controls the nation’s valuable energy resources.
At a Glance
- Iraq’s Oil Ministry is suing the Kurdish region over energy deals signed with US firms HKN Energy and WesternZagros valued at “tens of billions of dollars”
- The contracts were signed in Washington DC on May 19, prompting Baghdad to file a lawsuit in Al-Karkh commercial court seeking their cancellation
- The federal government claims these deals violate Iraqi law, insisting oil wealth belongs to all citizens and must be managed centrally
- Kurdish authorities maintain they have constitutional rights to sign independent energy contracts
- This dispute has previously led to Baghdad withholding Kurdistan’s budget share, causing economic hardship in the region
Federal Authority Challenged by Kurdish Energy Deals
Iraq’s Oil Ministry has filed a lawsuit against the semi-autonomous Kurdish region for signing gas contracts with American companies without federal consent. The legal action targets agreements the Kurdistan Ministry of Natural Resources signed with US firms HKN Energy and WesternZagros on May 19 in Washington DC. These deals, valued at “tens of billions of US dollars,” have intensified the ongoing power struggle between Baghdad and Erbil over control of Iraq’s abundant natural resources.
The specific projects involve HKN Energy partnering with Onex Group to develop the Miran gasfield through a joint venture called Miran Energy, while WesternZagros acquired the Topkhana block. Baghdad views these independent negotiations as a direct challenge to federal authority. The lawsuit was filed in Baghdad’s Al-Karkh commercial court with the explicit aim of canceling these contracts, which the federal government considers illegitimate.
Iraq's federal authorities have filed a complaint against the autonomous Kurdistan region for signing gas contracts with two US companies, two officials told AFP on Tuesdayhttps://t.co/QGgZRe3c7f
— The New Arab (@The_NewArab) May 27, 2025
Constitutional Crisis Over Resource Control
The Iraqi Oil Ministry has strongly condemned Kurdistan’s actions, describing them as “a clear violation to the Iraqi law.” The ministry maintains that natural resources are national assets that cannot be allocated or managed independently by regional authorities. This position reflects Baghdad’s interpretation of Iraq’s constitution regarding control over the country’s vast oil and gas reserves.
“Oil wealth belongs to all Iraqi citizens and any investment decisions should be made through the federal government.”, said The Iraqi Oil Ministry.
The Kurdish authorities, however, insist they have constitutional rights to negotiate and sign energy deals independently. This fundamental disagreement has persisted since the 2003 US-led invasion that overthrew Saddam Hussein’s regime. The Kurdish interpretation of Iraq’s post-invasion constitution has allowed them to develop their energy sector with foreign companies, despite Baghdad’s objections. This latest lawsuit marks another chapter in this unresolved constitutional conflict.
The Iraqi Oil Ministry has filed a lawsuit against the KRG over its new oil and gas contracts, making the likelihood of KRG oil exports resuming even less likely now.
As we’ve noted repeatedly, KRG oil is now primarily a geopolitical issue rather than an economic one, and the… pic.twitter.com/CcKaVxvyx2
— Kurdistan Watch (@KurdistanWatch) May 26, 2025
Economic Consequences of the Dispute
The standoff over resource control has had severe economic consequences for Kurdistan. Federal authorities have previously withheld the region’s share of the national budget due to these disputes, creating financial hardships for the semi-autonomous region. In early 2022, Iraq’s Federal Supreme Court ruled that the Kurdish regional oil law was unconstitutional and demanded that control of the sector be handed over to Baghdad.
The situation worsened when an arbitration ruling halted Kurdistan’s oil exports through Turkey, significantly affecting the region’s revenue streams and ability to pay public sector salaries. Despite these setbacks, Kurdish authorities continue to assert their right to manage regional resources, signing these latest gas contracts even as the dispute remains unresolved. No progress has been made to resume oil exports through Turkey or transfer control of energy resources to Baghdad.
