ERBIL, Kurdistan Region of Iraq – Iraq’s oil ministry on Thursday announced it has signed a contract with US-based HKN Energy to develop the Hamrin oil field in Basra, with production expected to peak at 140,000 barrels per day under the agreement.

“The move comes in line with the government's vision and strategy for the optimal investment of oil and gas,” Oil Minister Basim Mohammed Khudair said in a statement, adding that the average gas production will be 40 million standard cubic feet per day.

Khudair said the gas produced from the field “will not be flared,” adding that it will be used to generate energy for field operations, while surplus volumes will be reinjected to maintain reservoir pressure.

The Hamrin oil field, located in Basra, sits on a giant reservoir of around 3 billion barrels of oil. In July 2025, the oil ministry signed another contract with HKN to boost the field’s production capacity from 25,000 to 60,000 barrels per day.

Iraq’s economy relies heavily on oil, with hydrocarbon exports accounting for over 90 percent of its budget. 

The new agreement comes as Iraq seeks to boost domestic production after the US-Iran conflict and disruptions in the Strait of Hormuz significantly reduced the country's oil exports.

Iraq, under normal circumstances, produces an average of 4.4 million barrels of oil per day – the second-largest in OPEC after Saudi Arabia – and exports 3.3 million barrels of that amount.

The country has taken significant strides to develop its oil and gas sector in recent years. In July 2023, Iraq inked a $27 billion mega contract with France’s TotalEnergies to develop the oil and gas sector over 25 years.