ERBIL — The Karkh Court of Appeals has rejected an appeal by Iraq’s Oil Ministry and overturned 2022 rulings that had voided several oil contracts signed by the Kurdistan Regional Government (KRG).

The ruling, issued on December 18, is a significant legal victory for nine oil companies operating in Kurdistan: Addax, Dana Gas, DNO, GazpromNeft, Genel Energy, Gulf Keystone, HKN Energy, ShaMaran, and Western Zagros, according to Iraq Oil Report.

The decision brings temporary relief to oil companies caught in the long-running dispute between Baghdad and Erbil over control of oil resources. The Federal Supreme Court had previously declared the KRG’s oil operations “unconstitutional”, demanding that the Region transfer its oil revenues and contracts to the federal government.

Adding to the challenges, the Iraq-Turkey pipeline has been shut down since March 2023 following an international arbitration ruling favoring Baghdad. This closure has disrupted oil exports, forcing companies to explore alternative routes to market their crude while dealing with financial and operational hardships.

Baghdad has also insisted on centralized control over Kurdistan’s oil production and exports via the state-run SOMO, a move that threatens the KRG’s longstanding autonomy over its natural resources.

Though Iraq has offered compensation to affected companies, disputes over terms—such as production and transportation costs—have delayed payments, exacerbating financial uncertainty for operators.