Deadlocked talks over forming a new regional Cabinet highlight a bitter rivalry between two ruling parties that poses risks to Kurdistan's economy and energy sector.

A new deal for oil and budget cooperation between Baghdad and Erbil faces significant challenges to implementation, including crippling attacks on Kurdistan's oil sector.

Drones struck Tawke and Ain Sifni on Wednesday, marking three consecutive days of attacks on Kurdistan oil fields.

Attack on HKN-operated Sarsang field coincides with the company's signing of a preliminary upstream deal with the federal Oil Ministry.

Production and exports have not suffered major interruptions so far, but exodus of foreign oil workers and border closures highlight risks of disruption.