Kurdistan’s shadow government sign energy deals, defying Iraq

Kurdistans shadow government sign U.S. energy deals, defying Baghdad authority — Iraqi Kurdistan Region caretaker Prime Minister Masrour Barzani (standing) oversees the signing of two major energy deals with U.S. companies. Also pictured are Kamal Muhammad, the KRG’s Minister of Natural Resources (left), and Ross Perot Jr., on May 19, 2025. Photo: Screengrab from KRG video/iKurd.net

Despite lacking a newly formed government, Kurdish leaders in Iraqi Kurdistan ink major energy contracts, fueling concerns over legality, power centralization, and endemic corruption.

WASHINGTON,— In a move that has stirred controversy both in Baghdad and among legal experts, the Kurdistan Region’s caretaker administration signed on Monday two oil and gas contracts with American companies—bypassing Iraq’s federal government and deepening the political uncertainty in the semi-autonomous region.

The agreements, made public during a press conference in Washington, involve U.S.-based HKN Energy and WesternZagros and pertain to the development of the Miran gas field and the Topkhana oil field.

Situated in Sulaimani Province, the Miran and Topkhana-Kurdamir gas fields lie in territory governed by the rival Patriotic Union of Kurdistan PUK. The area is beyond the reach of Barzani’s government, which holds no administrative authority or control on the ground.

Kurdish officials estimate the potential revenue from the projects could reach $110 billion.

Masrour Barzani, the acting prime minister of the Kurdistan Regional Government (KRG), attended the signing, despite his government lacking an official mandate.

Elections were held in the region in 2024, but no new administration has since been formed, leaving Barzani in a transitional caretaker role.

Kamal Muhammad, the KRG’s minister of natural resources, acknowledged that Baghdad was not consulted in the deal-making. “We did not wait for Iraq’s approval,” he told reporters in the United States. “These agreements serve both Kurdistan and Iraq.”

Yet that assertion has done little to ease the criticism from legal scholars, political observers, and Iraqi federal officials, who argue that such high-stakes decisions exceed the authority of a caretaker cabinet and may breach constitutional boundaries.

A Baghdad-based constitutional expert, speaking to iKurd News on condition of anonymity due to the sensitivity of the issue, said “It’s highly concerning to see a transitional administration engaging in long-term strategic agreements. Such actions bypass democratic norms and undermine the legal framework of governance.”

Bafel Talabani, the President of the Patriotic Union of Kurdistan (PUK), Iraqi Kurdistan, October 2024. Photo: Talabani’s Press Office/via iKurd.net

Analysts say the PUK, led by the Talabani family, has historically pushed back against energy agreements pursued by the Barzanis in PUK-controlled territories. However, for the first time, the PUK has remained silent.

Party sources confirmed that PUK President Bafel Talabani was in the United States at the time for discussions with American officials. Notably, PUK media channels have refrained from voicing any public objection to the agreement.

According to observers, this suggests there may be a behind-the-scenes agreement between the PUK and KDP over energy deals with the U.S.

According to Iraq’s constitution, oil resources fall under national ownership, and any international contracts involving hydrocarbons are expected to be coordinated through the federal Ministry of Oil.

Srwa Abdulwahid Qadir. The head of the New Generation Movement (Newey Nwê) faction in the Iraqi Parliament, 2024. Photo: Abdulwahid’s FB

The head of the New Generation Movement (Newey Nwê) faction in the Iraqi Parliament, Srwa Abdulwahid, has warned that the caretaker prime minister lacks the legal authority to enter into high-value contracts.

Abdulwahid said in a statement, a ruling by Iraq’s Federal Court, which states that a caretaker Kurdish government is not permitted to sign or amend any agreements involving financial obligations.

She criticized recent moves by the outgoing administration to strike billion-dollar deals with private companies, calling such actions unconstitutional.

“The caretaker government’s mandate has expired, and it has no right to commit the country to binding contracts worth billions,” Abdulwahid said.

The KRG has long disputed this interpretation, operating semi-independently in matters of resource management—a point of recurring friction between Erbil and Baghdad.

The timing of the agreements has also reignited long-standing accusations of corruption within the KRG.

Transparency watchdogs, Kurdish lawmakers, and financial auditors have repeatedly flagged significant discrepancies in the region’s oil revenues. Leaked documents and internal reports suggest that billions of dollars remain unaccounted for.

Independent observers frequently describe the Kurdistan Region as Iraq’s most corrupt administrative zone.

Central to the scrutiny is the Barzani family, which dominates political and economic life in the region. Masrour Barzani, the prime minister, is the son of former president Massoud Barzani—still widely viewed as the region’s most powerful figure. His cousin Nechirvan Barzani currently serves as president.

Critics, including opposition figures and civil society activists, describe the ruling Barzani family as ‘Kurdish oligarchs,’ accusing them of amassing personal wealth through the oil sector while public services and state institutions remain neglected and underdeveloped.

“The public sees billions going missing and services stagnating,” said one Kurdish parliamentarian who requested anonymity. “Meanwhile, deals are signed abroad with zero transparency.”

The KRG’s internal political landscape adds another layer of complexity. While the Barzani-led Kurdistan Democratic Party (KDP) maintains control over Erbil and Duhok governorates, the PUK—led by the rival Talabani family—administers both the Sulaimani and newly established Halabja governorates.

This entrenched political division has long hampered unified governance, undermined institutional accountability, and contributed to inconsistent policymaking across the Kurdistan Region.

Despite the controversies, the U.S. Chamber of Commerce welcomed the new energy deals. Steve Lutes, the chamber’s vice president for Middle East affairs, praised the agreements and the KRG’s delegation during their visit to Washington.

The Iraqi Oil Ministry, in a statement on Tuesday, rejected the KRG’s U.S. energy contracts.

Iraqi officials have previously warned that unauthorized contracts could be deemed null and void under Iraqi law.

For now, as political negotiations to form a new Kurdish government continue without resolution, observers warn that such unilateral actions risk further complicating the legal standing of the region’s leadership—and its already fraught relationship with Baghdad.

In April 2025, U.S. energy giant General Electric inked a $100 million agreement with Sulaimani-based Taurus Arm to modernize the Bazyan power plant, located in the Kurdistan Region’s PUK-controlled area.

(With files from Agencies)