Iraq’s energy sector is undergoing an unprecedented transformation, with $52 billion in new international investments signed in 2024-2025 alone, yet the legal landscape remains treacherous for unprepared foreign investors. Recent judicial reversals, massive arbitration wins, and evolving regulatory frameworks have created both extraordinary opportunities and complex legal challenges that demand sophisticated local expertise to navigate successfully.
The difference between success and failure often hinges on having the right lawyers in Iraq who understand both the opportunities and the pitfalls.
For over two decades, HHL (Al-Hadeel Al-Hasan Law Firm) has served as Iraq’s premier legal gateway for international energy investments, combining deep local expertise with international standards to guide clients through Iraq’s unique legal maze. As international oil companies and energy investors increasingly recognize Iraq’s potential—production targets of 6 million barrels per day by 2028 and 7 million by 2029—the need for sophisticated legal counsel has never been more critical.
Constitutional complexity creates winner-take-all scenarios
Iraq’s energy sector operates within a constitutional framework that has generated billions of dollars in disputes between federal Iraq and the Kurdistan Regional Government. Article 112 of the Iraqi Constitution creates ambiguous authority over oil and gas management, leading to the landmark 2022 Federal Supreme Court ruling that declared the KRG’s 2007 Oil & Gas Law unconstitutional. This ruling alone threatened $110 billion in KRG contracts with international companies.
Yet legal dynamics shifted dramatically in 2025. Baghdad’s Karkh Court overturned anti-KRG rulings in January, followed by the Federal Supreme Court’s dismissal of lawsuits against KRG gas contracts with HKN Energy and Western Zagros in July. These reversals demonstrate the fluid nature of Iraq’s legal environment and why companies need counsel who understand not just the law, but the political and judicial dynamics driving legal decisions.
HHL’s founding partners bring precisely this expertise. Hadeel A. Hasan, recognized as EY Woman of the Year 2019 for the MENA region, has navigated Iraq’s energy sector since her early career at the Iraqi Atomic Energy Commission. Partner Ghazi F. Ali has spent 19 years specializing in Iraqi oil and gas laws, serving as expert witness in international tribunals and managing an $800 million oil refinery investment portfolio. Their combined experience spans the evolution of Iraq’s modern energy legal framework.
Companies operating in the Kurdistan Region face dramatically different legal realities than those working with federal Iraq. KRG allows 100% foreign ownership while federal Iraq limits foreign companies to 49% ownership. Production sharing agreements dominate in Kurdistan, while Baghdad typically requires technical service contracts with limited profit potential. Law firms in Iraq must navigate these parallel legal systems while anticipating how federal-regional disputes might affect their clients’ operations.
International arbitration emerges as critical battleground
Iraq’s energy sector has become a major theater for international arbitration, with outcomes that redefine investment risks and opportunities. The country’s 2022 accession to the New York Convention and 2024 ratification of the Singapore Convention on commercial mediation represent fundamental shifts toward international legal standards, but practical enforcement remains challenging.
Recent arbitration outcomes tell a compelling story of both risks and opportunities. Iraq secured a massive victory against Turkey in ICC arbitration, for unauthorized KRG oil exports between 2014-2018, with an additional claim pending for 2018-2023 exports. This ruling demonstrates Iraq’s growing success in international legal forums and its commitment to protecting energy revenues.
Conversely, the Kurdistan Regional Government achieved its own arbitration success against Genel Energy, with the LCIA upholding KRG’s contract terminations and ordering Genel to pay costs. These cases illustrate how arbitration clauses, jurisdiction selection, and legal strategy can determine investment outcomes worth billions.
HHL’s arbitration expertise has been tested in international forums, with Ms. Hadeel serving as expert witness in DIAC arbitration Case No. 183/2016 in The Hague, where his testimony helped secure victory for clients. The firm’s experience spans ICSID, ICC, and LCIA proceedings, providing clients with battle-tested expertise in forums where energy disputes are increasingly resolved.
For investors, these precedents underscore the critical importance of sophisticated contract drafting, arbitration clause selection, and dispute prevention strategies. Companies entering Iraq’s energy sector without expert legal counsel risk joining the growing list of failed international arbitration claimants, while those with proper legal structuring can access one of the world’s most lucrative energy markets.
Commercial realities demand practical legal solutions
Beyond constitutional complexities and arbitration risks, Iraq’s energy sector presents day-to day operational challenges that require practical legal solutions.
US sanctions compliance has become increasingly complex, particularly after the March 2025 expiration of sanctions waivers for Iraqi imports of Iranian gas and electricity under the Trump administration’s renewed “maximum pressure” campaign. Companies must navigate restricted account requirements for Iraqi payments to Iran while managing their own dollar access through banks increasingly scrutinized by US regulators.
HHL’s practical approach extends beyond theoretical legal advice to real-world operational support. Our firm has guided clients through the complexities of Iraqi Producing Field Technical Service Contracts (PFTSC) and Development and Production Service Contracts (PDSC), managed environmental compliance issues in the Hammar Marshlands, and structured long-term leasing arrangements for energy infrastructure projects.
The firm’s multi-office presence—Baghdad, Basra, Erbil, and Amman—provides on-ground support across Iraq’s key energy regions. This geographic coverage becomes essential when dealing with governorate-level regulations, tribal land agreements, and local security coordination that can make or break energy projects.
Strategic positioning for Iraq’s energy future
Iraq’s energy ambitions extend far beyond current production levels. The Iraq-Turkey Pipeline shutdown since March 2023 eliminated Kurdistan’s ability to export 450,000 barrels daily, forcing fundamental restructuring of energy export strategies. Meanwhile, massive new discoveries like the 2-billion-barrel find in East Baghdad demonstrate the country’s continued hydrocarbon potential.
The regulatory environment is evolving rapidly to accommodate international investment. Iraq’s long-awaited federal oil and gas law, in development for over 15 years, is expected to pass following recent elections, potentially offering improved terms including production sharing agreements instead of technical service contracts. These changes will create new opportunities for companies positioned to act quickly with proper legal preparation.
HHL’s strategic value lies in anticipating and preparing for these changes. The firm’s deep relationships with Iraqi ministries and decision-makers—demonstrated through founder Hadeel A. Hasan’s roles on the Executive Committee of the Iraqi British Business Council and multiple industrial development steering committees—provide clients with early insight into regulatory developments.
Energy diversification initiatives present additional opportunities. Iraq’s target of meeting 33% of electricity needs through renewables by 2030 requires 18 GW of new capacity, while the GCC grid connection project will deliver 1.8 GW by 2025. Companies entering these emerging sectors need legal counsel who understand both traditional energy frameworks and evolving renewable energy regulations.
Conclusion: In the growing Energy sector, Legal excellence is the competitive advantage
Iraq’s energy sector transformation offers extraordinary opportunities for international investors willing to navigate its complex legal landscape with expert guidance. Recent arbitration victories, regulatory improvements, and massive new investments demonstrate the country’s potential, but success requires sophisticated legal strategy and deep local expertise.
HHL’s slogan of “Your Legal Window Into Iraq” reflects more than marketing rhetoric—it represents 26 years of practical experience guiding international clients through Iraq’s evolving legal environment. In a market where legal missteps can cost billions and regulatory expertise can unlock extraordinary returns, choosing the right legal counsel becomes the most critical investment decision companies make.
For energy investors serious about Iraqi opportunities, the question isn’t whether to engage expert legal counsel, but whether they can afford not to work with Iraq’s most experienced energy law specialists. The difference between success and failure in Iraq’s energy sector often comes down to having lawyers who understand not just the law, but the relationships, politics, and practical realities that determine investment outcomes.
Recent Comments