UK oil and gas giant bp will sign a deal with the Government of Iraq to redevelop four oil and gas fields in the Kirkuk region in northern Iraq, according to Iraq’s Oil Minister Hayan Abdel-Ghani.
The deal could be signed by the first week of February, the minister told Reuters.
According to the minister, this deal is expected to be larger than TotalEnergies’ $27bn (€26.22bn) agreement in Basra.
The preliminary agreement, as reported by Iraq’s state news agency, aims to evaluate the redevelopment of the Kirkuk oil and gas field and neighbouring fields.
This megaproject not only focuses on enhancing oil production but also incorporates plans to recover flared gas, a move that could bolster Iraq’s electricity production, reported AFP.
The project would potentially increase the production capacity of the four fields to 500,000 barrels per day (bpd), up from the current 350,000bpd.
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By GlobalDataThe increased oil output is expected to feed under-utilised northern refineries.
Iraq ranks third globally in gas flaring, following Russia and Iran, with approximately 18 billion cubic metres flared in 2023, as per the World Bank.
By 2026, the country aims to curb 80% of flared gas and completely eliminate the practice by 2028.
The deal, reached in December on technical terms, is part of Iraq’s broader strategy to boost gas production and capture.
As the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) after Saudi Arabia, Iraq has a production capacity of nearly five million barrels per day.
The new agreements are expected to offer more favourable profit-sharing terms than previous contracts, which provided foreign companies with minimal margins, sources told Reuters.
BP has a long-standing history in the region, being part of a consortium that first discovered oil in Kirkuk in the 1920s.
With an estimated nine billion barrels of recoverable oil in the area, bp maintains a presence through a 50% stake in a joint venture operating the Rumaila oilfield in southern Iraq, where it has been active for a century.
