Image by Zbynek Burival via Unsplash
Iraq has entered into a preliminary agreement with British oil giant BP to develop the northern Kirkuk oil and gas fields, Reuters news agency reported citing a statement from the Iraqi prime minister’s office.
The agreement, signed in Baghdad by Iraq’s oil minister Hayan Abdel-Ghani and BP CEO Murray Auchincloss, outlines BP’s plans to develop four oil and gas fields in the Kirkuk region.
BP and Iraq’s oil ministry initially signed a letter of intent in 2013 to study the development of the giant Kirkuk oilfield. According to BP, Kirkuk is estimated to hold around nine billion barrels of recoverable oil.
However, the project was halted in 2014 when the Iraqi army collapsed in the face of the Islamic State’s advance in Northern and Western Iraq, allowing the Kurdish regional government (KRG) to seize control of the Kirkuk region.
BP will now begin formulating a major plan to enhance crude oil and gas output capacity from the Kirkuk, Bai Hasan, Jambour, and Khabbaz fields, as stated by Iraq oil ministry officials.
The Kirkuk field, discovered in 1927, is the birthplace of Iraq’s oil industry. As the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia, Iraq currently has the capacity to produce nearly five million barrels per day.
BP’s statement highlighted the potential to stabilize production and reverse decline through the rehabilitation of existing facilities, the construction of new facilities, including gas expansion projects, and a drilling program at the Kirkuk fields.
According to BP, negotiations over the preliminary agreement are expected to be finalized by early 2025.
Baghdad regained full control of the deposit from the regional government in 2017 following a failed Kurdish independence referendum, allowing BP to resume its studies on the field. BP had withdrew from the oilfield in late 2019 after its 2013 service contract expired without an agreement on the field’s expansion.
