BP has reached an agreement with the Government of Iraq to invest in multiple key oil fields in the Kirkuk area. The deal centers on the redevelopment and rehabilitation of the fields, encompassing oil, gas, power, water, and prospective exploration investments. The transaction, pending final government approval, is an important milestone in BP’s strategic activities in Iraq.
New Joint Operator to Oversee Operations
Once ratified by the Council of Ministers, BP will collaborate with the Iraqi government to set up a new operating entity, consisting primarily of personnel from Iraq’s North Oil Company (NOC) and North Gas Company (NGC), with BP secondees included. The newly formed operator will take over from NOC and manage operations at the Kirkuk fields. BP also plans to create a standalone joint venture to hold its interests in the operator.
Longstanding Partnership and Strategic Investment
This deal follows up on the MOU signed in July 2024, with technical terms in December and commercial terms in January. BP had worked on these fields before from 2013 to 2019, so this deal is a natural progression in their relationship.
The first phase of the deal is oil and gas production in several fields, such as the Baba and Avanah domes of the Kirkuk oil field, as well as Bai Hassan, Jambur, and Khabbaz fields, which are being operated by NOC. The total prospective resources from the region are thought to contain up to 20 billion barrels of oil equivalent.
Major Growth Opportunity for Iraq
BP’s executive vice president, William Lin, said, “This agreement builds on our longstanding and strategic relationship with the Government of Iraq and delivers access to a material new resource opportunity, within one of the world’s most prolific hydrocarbon provinces.”
He added, “It will enable us to bring our experience of managing giant fields to realise the potential of this important asset for Iraq, working alongside and in close partnership with NOC and NGC. This opportunity is fully in line with our priority of pursuing new growth opportunities for bp as we strengthen and high-grade our portfolio across the world. We thank the Government of Iraq for the trust and privilege to deepen our cooperation in-country.”
Enhancing Production and Infrastructure
According to the terms of the deal, NOC, BP, and NGC will collaborate to stabilize and boost production. The project will involve drilling, reviving existing wells, upgrading facilities, and building new infrastructure, including gas expansion projects. BP will earn compensation based on increased production volumes, receiving a share of the reserves for its contribution.
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Economic and Regional Growth
Investment in the oil fields of Kirkuk will spur economic growth in the region. The project will have positive impacts for the locals, improve supply chain capacity, and provide new opportunities for jobs. BP has designed the project to fit its financial framework, expecting returns that exceed the company’s investment targets.
BP expects work to start in 2025, marking the beginning of a new chapter in Iraq’s energy sector development.