Oil exports have been a major point of tension between Baghdad and Arbil, with a major pipeline through Turkey shut since 2023 over legal disputes and technical issues.

Regional prime minister Masrour Barzani announced the signing of two major energy deals valued at "tens of billions of US dollars" during a visit to Washington in May.

Iraq's oil ministry immediately slammed the agreements, saying it constitutes a "clear breach of Iraqi law" and that all oil and gas development must go through the federal government.

An Iraqi government official, who requested anonymity to speak on the matter, told AFP that a lawsuit had been filed before Baghdad's Al-Karkh commercial court.

A Kurdish official confirmed the complaint, saying it called for "the cancellation of the contracts".

The agreement with WesternZagros involves the development of the Topkhana block, which together with the neighbouring Kurdamir block is estimated to contain up to 5 trillion standard cubic feet of natural gas and 900 million barrels of crude oil.

According to a press release, this could generate an estimated $70 billion in revenue over the lifetime of the project.

The deal with HKN Energy covers the Miran gas field, which may hold up to 8 trillion standard cubic feet of natural gas, with a projected long-term value of $40 billion.

Oil exports were previously independently sold by the Kurdistan region, without the approval or oversight of the central administration in Baghdad, through the port of Ceyhan in Turkey.

But the region's oil exports have been at a standstill since March 2023 when the arbitration tribunal of the International Chamber of Commerce in Paris ruled that oil exports by the regional government were illegal.