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Iraq, BP to sign Kirkuk oil and gas deal by first week of Feb, oil minister says

January 15, 2025 at 10:32 am

Iraqi Oil Minister Hayan Abdel-Ghani in Baghdad, Iraq on November 22, 2023 [Murtadha Al-Sudani – Anadolu Agency]

Iraq and British oil major BP BP.L will sign a mammoth deal covering four Kirkuk oil and gas fields by the first week of February, Oil Minister Hayan Abdel-Ghani told Reuters during a visit to Britain.

He said it would be larger than a 2023 TotalEnergies TTEF.PA deal in Basra, valued around $27 billion.

Iraq’s state news agency said today that Baghdad and BP had signed a preliminary agreement to evaluate the possibility of redeveloping the Kirkuk oil and gas field and other neighbouring fields without providing further detail.

Abdel-Ghani said that oil production would be raised by up to 150,00 barrels per day (bpd) under the deal, which also had a gas component.

The oil would flow to refineries in the north currently operating below capacity, he added.

“These are big investments,” he said.

BP did not immediately respond to a request for comment.

Iraq aims to boost gas production and capture, with the aim of ending the wasteful and environmentally damaging practice of burning excess gas from oil production, known as flaring, by 2028.

BP and Iraq reached a deal in December on the technical terms to redevelop the Kirkuk fields.

Iraq, the second-largest oil producer in the Organisation of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia, has the capacity to produce nearly five million pbd.

Unlike historic contracts that offer foreign companies razor-thin margins, the new agreements are expected to include a more generous profit-sharing model, sources have told Reuters.

BP was a member of the consortium of oil companies that discovered oil in Kirkuk in the 1920s and has estimated that the area holds about nine billion barrels of recoverable oil.

The company holds a 50 per cent stake in a joint venture operating the giant Rumaila oilfield in the south of the country, where it has been operating for a century.

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