According to al-Jazeera, citing various (alas unnamed Russian and Kurdish diplomats/officials), Russia financially "saved" the KRG at a crucial time, by having its major oil/gas companies Rosneft and Gazprom invest in the KRG.

Having racked up a debt of between $20bn and $25bn (way above the size of its economy), the KRG was running out of options to save itself from bankruptcy. In March 2016, the KRG offered major oil assets to Turkey in exchange for $5bn in debt forgiveness and cash, in addition to the $1bn Ankara had already lent; major oil deals were also offered to US companies. Both the Turks and the Americans, however, appeared reluctant to take up what was on offer. [...]

on February 21 [2017?], Rosneft joined Gazprom as a major investor in the Kurdish region [of Iraq] by signing a deal worth $2.1bn for pre-paid oil for 2017-2019 and becoming the first major oil company to pre-finance KRG oil. That cash injection was crucial.

It then discusses a few more similar deals KRG struck with Rosneft in September-October 2017, totalling $2.8 billion, and notes these were done around the [time of the] Kurdish independence referendum that year.


Iraq’s top court last February [2022] found the Kurdistan Region’s oil and gas law to be “unconstitutional,” therefore striking down the legal basis for the independence of the Region’s oil and gas sector. The court’s decision was repeatedly slammed by top Kurdish leaders [...]

But I'm curious if the Iraqi government has said something more explicit about those deals that the KRG made with Russian companies. Were they deemed legal (or illegal) by Iraq's central government?

1 Answer 1


Yes, subsequent to the judgement of the Iraqi court invalidating KRG's Oil and Gas laws, Baghdad has threatened legal action against oil companies in the region. It has threatened to block vessels transporting crude oil from Kurdistan region and has also blacklisted oilfield service firms:

Iraq's state-owned oil marketer SOMO has threatened fresh legal action against buyers of crude oil originating from the semi-autonomous Kurdistan region ... "The Iraqi federal ministry of oil and SOMO as its affiliate reserve the right to take all legal measures against any dealer or buyer of smuggled crude oil that has been proven to have loaded Iraqi oil from, precisely, Turkey's Ceyhan Oil Terminal, without the explicit endorsement of SOMO," it stated.

The action mirrors a similar move by Iraq’s oil ministry in 2014 to block vessels loading crude from the Kurdistan region from unloading at foreign ports ... It has summoned several firms operating in the Kurdistan region to commercial court sittings ... and introduced a policy to blacklist oilfield service firms if they did not withdraw from the Kurdistan region. - Iraq threatens new legal action against Kurdistan crude buyers

But does that threaten the Russian investment? Tensions are certainly high between KRG and Iraqi government after this ruling. Some US oil companies have already stopped work in Kurdistan after the court ruling suggesting that international players are already choosing sides and may add to the tension:

"In view of the many questions addressed by the international and local press regarding the position of the international oil services companies operating in the Kurdistan region, regarding the decision of the Federal Court, we affirm that the companies (Schlumberger, Big Hughes, and Halliburton) which are from ones of the sober international companies in the field of oil services chock, and according to its official communications to the ministry, confirmed not to submit to new projects in the Kurdistan region in compliance with the decision of the Federal Court and the directives of the steering committee formed in the Ministry of Oil," according to the Ministry ... The statement highlighted that "the above companies are now in the process of liquidating and closing the existing tenders and contracts." - Ministry of Oil: The international oil companies position operating in KRG to Federal Court decision

A geopolitical battle for this region between Russia, Turkey and US seems highly likely. But the KRG apparently believes that Russia has invested with the long-term view that KRG will continue to be a major player in this area:

According to Jabbar Kadir, who had served as an adviser to former KRG Prime Minister Barham Salih, the Russians see the Kurds as key players in the future of the region.

“Russia believes Iraq will be divided, if not into three states, [then] at least into three federal regions. That is why [Russia] has slowed down working with the central government. If Baghdad opposes the deal, the KRG and Russians will tell them, ‘You are making deals with Americans. They explore oil in the Kurdish region. We will do the same,’” Kadir told Al-Monitor.

“You cannot ignore the political ramifications of all this. Until now, Turkey used to manage the oil affairs of Kurdistan and impose its own conditions. It won’t be able to do this with Rosneft. That is why this is a landmark deal for the future of Kurdistan ...” he added.

And how will the United States and Turkey react to their shares of the pie getting smaller? Kadir believes the United States won’t be all that happy with the deal. The Kurds must have consulted Ankara and Washington in advance so as not to upset the Americans too much, as they know the United States has strategic ties with Iraq. - Iraqi Kurdistan-Russia oil deal could have major implications for region

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .