Promise Seen in US Firms Helping Oil, Gas Development in Kurdistan

There is ample opportunity for U.S. cooperation on oil and gas development in Iraqi Kurdistan, U.S. Energy Secretary Chris Wright said on Thursday, despite Iraq's federal government disputing deals that U.S. companies signed with the region this week.

Iraqi Kurdish Prime Minister Masrour Barzani this week oversaw the signing of two agreements in Washington with U.S. companies HKN Energy and WesternZagros worth a combined $110 billion over their lifetimes.

"I see great opportunity for American cooperation there as evidenced by the signing of these two deals and we would love to see that commercial relationship grow and flourish," Wright told a conference in Washington.

The deals drew swift opposition from Baghdad's oil ministry which deemed them "null and void." Control over oil and gas has long been a source of tension between Baghdad and Erbil.

An Iraqi oil ministry official said the signing of the agreements were conducted without Baghdad's knowledge and would impact efforts to resume the export of Kurdistan regional oil.

An oil pipeline running through Turkey has been halted since March 2023 after the Paris-based International Chamber of Commerce ruled Ankara violated provisions of a 1973 treaty by facilitating Kurdish exports without Baghdad's consent.

Negotiations to resume Kurdish oil exports via the Iraq-Turkey pipeline, which once handled about 0.5% of global oil supply, have stalled over payment terms and contract details.

Iraq's power generation depends heavily on Iranian natural gas imports. Boosting Iraqi Kurdistan's oil and gas production could wean northern Iraq off that dependence and keep pressure on Tehran as Washington tries to prevent it from developing a nuclear weapon. Iran says its nuclear program is for peaceful purposes.

Wright said the development of oil and gas in Iraqi Kurdistan would help northern Iraq and its allies.

"It's very aligned with President (Donald) Trump's agenda to have unleashed energy dominance in the United States and to our allies abroad," he said.