In May, Iraq is expected to put around a dozen oil and natural gas blocks up for auction in its fourth licensing round. International companies have deals with the Kurdish government but the central government questions the validity of the contracts.
Robert Gillon, director of energy company research at IHS Global Insight, said some blocks from oil fields in the Kurdish north contain hundreds of millions of barrels of oil.
"The potential is immense but the risks are quite pronounced," he said in a statement.
IHS blamed geopolitical and "several technical" risks to energy companies working in the semiautonomous Kurdish region. Reserve estimates vary widely because few appraisal wells were drilled while export pipeline capacity is short of what's needed in the region.
Gillon said energy companies in the region need to have a "very high tolerance for risk" to have success.
"The value in the play is there, that is clear," he said. "What is not clear is whether that value will be realized in a timeframe that is acceptable to investors."