KRG economy

Petroleum and mineral resources


KRG-controlled parts of Iraqi Kurdistan are estimated to contain around 45 billion barrels (7.2×109 m3) of oil, making it the sixth largest reserve in the world. Extraction of these reserves began in 2007. Iraq's former Ba'ath government controls the resources of Kirkuk and Mosul, cities claimed by the KRG to be included in its territory.

In November 2011, Exxon challenged the Iraqi central government's authority with the signing of oil and gas contracts for exploration rights to six parcels of land in Kurdistan, including one contract in the disputed territories, just east of the Kirkuk mega-field. This act caused Baghdad to threaten to revoke Exxon's contract in its southern fields, most notably the West-Qurna Phase 1 project.

Exxon responded by announcing its intention to leave the West-Qurna project. As of July 2007, the Kurdish government solicited foreign companies to invest in 40 new oil sites, with the hope of increasing regional oil production over the following 5 years by a factor of five, to about 1 million barrels per day (160,000 m3/d). Gas and associated gas reserves are in excess of 2,800 km3 (100×1012 cu ft.). Notable companies active in Kurdistan include Exxon, Total, Chevron, Talisman Energy, Genel Energy, Hunt Oil, Gulf Keystone Petroleum, and Marathon Oil.

Other mineral resources that exist in significant quantities in the region include coal, copper, gold, iron, limestone (which is used to produce cement), marble, and zinc. The world's largest deposit of rock sulfur is located just southwest of Arbil (Hewlêr).

In July 2012, Turkey and the Kurdistan Regional Government signed an agreement by which Turkey will supply the KRG with refined petroleum products in exchange for crude oil. Crude deliveries are expected to occur on a regular basis.