During a high-profile diplomatic and commercial mission spanning Washington and Houston, the Iraqi Prime Minister Ali al-Zaidi supervised the signing of an ambitious slate of agreements and memoranda of understanding with leading American energy corporations. These contracts encompass three vital pillars designed to reshape Iraq's energy landscape: drastically scaling up crude oil production, diversifying bottled-up export channels, and eliminating the chronic flaring of associated natural gas—a practice that has crippled the national energy grid and wasted precious economic resources for over a decade.
The Baba Gurgur field, located 16 kilometers northwest of Kirkuk province, was the first oil well drilled in Iraq and was considered the world's largest oil field until the discovery of the Ghawar field in Saudi Arabia in 1948. However, three years after Iraq's $25 billion agreement with British Petroleum (BP), it has still not been possible to bring its production level above half a million barrels per day or end its associated gas flaring. During Zaidi’s weeklong visit to Washington, the American company ConocoPhillips was brought in as a 42 percent partner to explore the same Kirkuk area to develop and increase oil production, provide new technology, assist the North Oil Company, support the Ministry of Oil's plan, and further utilize hydrocarbon resources.
In reality, the signing of 48 agreements worth $60 billion by Zaidi and his delegation with American companies has put the oil and gas industry to a new test. The main question is: Will Baghdad fulfill its long-standing promises to increase production, stop gas flaring, and diversify exports through these agreements, or will the agreements remain on paper and past scenarios repeat themselves?
The $60 billion deal spectrum, the recurrent trap of production targets
The signing of 48 distinct contracts valued at over $60 billion between the Iraqi delegation and American multinationals places the nation’s oil and gas architecture under an unprecedented test. According to official disclosures by the Iraqi Ministry of Oil, the agreements target critical asset development across the central and southern provinces.
A notable partnership with Halliburton targets the Bin Umar field, aiming to raise crude output to 150,000 bpd while capturing 300 million cubic feet per day (mmcf/d) of associated gas. Similarly, development plans for the Sindibad field seek to boost oil extraction from 80,000 to 100,000 bpd, while capturing 240 to 260 mmcf/d of gas that would otherwise be flared into the atmosphere.
However, the core question haunting energy analysts is whether Baghdad can finally break its cycle of unfulfilled promises, or if these historic signings will join a long list of paper agreements stalled by bureaucratic, political, and security headwinds.
Iraq's modern history is replete with grand announcements regarding crude production capacity, few of which have materialized on schedule: March 2017: The Ministry of Oil pledged to lift production and exports past five million bpd by the end of that year. Nearly a decade later—and despite investing over 70 trillion Iraqi dinars—that threshold remains unmet. Late 2018: Under the cabinet of Adel Abdul Mahdi, officials outlined plans to exceed five million bpd in 2019 while curbing gas flaring.
Subsequent Revisions: Former Oil Minister Ihsan Abdul Jabbar unveiled a strategy to add three million bpd by 2028, aiming for total output exceeding eight million bpd. That target was subsequently pushed to 2029 following the execution of TotalEnergies’ megaproject, and later scaled back to a conservative six million bpd by late 2027. Early 2024: Former Oil Minister Hayan Abdul Ghani re-announced a five-year roadmap targeting six million bpd, a metric reiterated during the Fifth-Plus licensing rounds. Present Day: The current administration has pledged to elevate national crude capacity beyond seven million bpd by the end of 2029.
These promises come at a time when—just one day after the Washington and Houston agreements, before the Iraqi delegation even returned to Baghdad—the company HKN, which had signed an agreement to begin work in the Hamrin field to produce 140,000 barrels of oil and 40 million cubic feet of gas per day, not only did not start work, but also suspended oil production in the Atrush and Sarsang fields in the Kurdistan Region and halted all its operations across Iraq and the Kurdistan Region.
Associated gas flaring and costs
Since the beginning of oil extraction in Iraq, associated gas flaring has continuously existed. The volume of this gas is directly tied to the level of oil production and the existence of new projects to utilize it.
According to the latest World Bank Group report—which has published associated gas data since 2012 and used a new methodology this year to collect gas flaring data from three different sources—the West Qurna-2 field in Iraq ranks first globally in associated gas flaring. Annually, 2.7 billion cubic meters of gas are flared there, which accounts for nearly 40 percent of the gas Iraq imports from abroad (which was 6.8 billion cubic meters in 2025). World Bank data in 2025 shows that the total gas flared across 296 fields, wells, and refineries throughout Iraq reached 24.12 billion cubic meters—three times the total imported amount. Basra province leads with 13 billion cubic meters flared.
Among all 296 sites, the highest level of gas flaring was recorded at West Qurna-2, reaching 4 billion cubic meters per year. This field, which was taken from Lukoil due to US sanctions and given to Chevron, has a daily production of nearly half a million barrels of oil. Following this field, the highest amount of associated gas flaring is in Kirkuk province at the Bai Hassan field, reaching 1.3 billion cubic meters in 2025. This Bai Hassan amount alone is equal to 20 percent of the annual gas produced by Dana Gas at the Khor Mor field—which supplies 80 percent of the Kurdistan Region's electricity and sells more than 1,300 MW to Iraq. However, at the time of writing this article, production operation has been suspended there due to security risks and attacks by armed groups (having been attacked more than 11 times in the recent period).
The story of ending associated gas flaring is very similar to the promises of increasing oil production. Surprisingly, despite changes in oil ministers, the signing of numerous contracts, and the expenditure of trillions of dinars, the deadline to end gas flaring was extended by another two years. Previously scheduled to end by 2028, the date has now been pushed to late 2029 and early 2030.
Diversifying export corridors, geopolitical vulnerabilities
Another portion of the Washington and Houston contracts is dedicated to opening new routes and installing new pipelines to transport Iraqi oil abroad, freeing the country from complete reliance on the Strait of Hormuz. Although this has long been discussed as a plan and strategy, Iraq has suffered significant losses over the past five months due to relying on a single export route. In fact, daily export levels in May were lower than those exported after the US invasion in mid-2003, and even one-sixth of the era under the "Oil-for-Food" program.
Over the past two decades, nearly 94 percent of Iraq's oil was sent to markets through the ports of Basra and Faw via the Strait of Hormuz. However, during the 40-day war and up to now, ship transit has not normalized. Due to the closure of the strait during this war, according to Kpler data, Iraq's production and export levels fell below Iran's.
Installing new pipelines and reactivating Iraq's interconnected export network—similar to pre-1980 conditions when a single pipeline and storage system stretched from the south to central Iraq and Kirkuk—requires significant time and budget. Similarly, reopening the Kirkuk–Baniyas, South–Haditha, Basra–Aqaba, and Kirkuk–Turkey pipelines is not easy. Regarding the Kirkuk–Turkey pipeline, completion of its renovation has been discussed since March, but oil has not yet been fully exported through it. If operations complete in the coming days, decisions may be made regarding new contracts to transport Basra oil by tanker to Kirkuk and then via pipeline to Turkey. In truth, security risks cannot be ignored—risks that reduced Iraq's oil production from 4.7 million barrels per day to 2 million barrels last month and created an unstable environment for foreign companies. The suspension of HKN's operations is a small example of these complexities, alongside ongoing hurdles between Erbil and Baghdad and the lack of an oil and gas law.
Conclusion
According to documents from Iraqi Oil Company representatives at foreign conferences, raising production to 6–7 million barrels per day, ending associated gas flaring, and diversifying export routes were discussed nearly a decade ago. Yet today's reality shows that Iraq is producing only half of what it produced before the start of this year. Due to security risks, foreign companies cannot even supply the gas needed to generate electricity during July's heat for the population, let alone reach a production of seven million barrels and end gas flaring.
All of this comes at a time when, during the previous cabinet alone (2022–2025), over 37 trillion dinars were invested in Iraq's oil and gas sector. However, according to World Bank data, associated gas flaring saw no decrease and actually increased; it was 14.67 billion cubic meters in 2022, but reached 15.06 billion cubic meters in 2025. This occurred even as oil production levels dropped from 4.47 million barrels per day in 2022 to 4.38 million barrels in 2025.
In conclusion, while the Washington and Houston agreements could serve as a gateway to introduce advanced American technology, foreign investment, energy sector revival, reduced gas flaring, and export route diversification, fundamental changes during this cabinet remain unlikely without root-and-branch management reform in the energy sector and an end to foreign influence over Iraq. Without these, the promises of Houston and Washington will simply join the archives of unfulfilled agreements from the past decade.
