BP pumps $25B into Iraq’s Kirkuk

Shafaq News/ British energy giant BP will invest about $25 billion to redevelop four oil and gas fields in Iraq's Kirkuk under a long-term contract to boost production and support local energy infrastructure, an Iraqi oil expert revealed on Monday.

“The agreement with Iraq’s Ministry of Oil is expected to help revive output at the North Oil Company, which has struggled since the 2014 ISIS insurgency and subsequent stagnation,” oil expert Ali Khalil told Shafaq News, adding that the contract will also contribute to the development of the North Gas Company and the construction of solar-powered power stations.

Khalil said BP’s investment is intended to increase crude oil production from the Kirkuk fields by about 150,000 barrels per day (bpd), targeting a total capacity of at least 450,000 bpd within two to three years.

According to the expert, Kirkuk’s oil output has seen sharp declines over the years. Between 2005 and 2010, production ranged from 600,000 to 725,000 bpd, with around 500,000 bpd exported to Turkiye’s Ceyhan port. By 2014, production had fallen to 400,000-500,000 bpd, dropping further to 250,000-325,000 bpd in the following years due to reduced well productivity.

“BP’s deal, structured as a profit-sharing agreement lasting over 25 years, will allow the company to recover costs and start generating profits once production surpasses current levels,” Khalid noted, emphasizing that the partnership will also focus on rehabilitating production facilities and expanding natural gas development to support Iraq’s domestic energy needs.

The contract, set to take effect in the coming days, includes the redevelopment of the Baba and Avana domes, Bai Hassan, Jambur, and Khabbaz oil fields. It also covers improvements to the North Gas Company’s infrastructure, Iraq’s largest state-owned gas firm, which supplies power plants with fuel.

BP, which was part of the consortium that discovered oil in Kirkuk in the 1920s, previously signed a letter of intent in 2013 to study the Kirkuk fields’ development, but the plan was suspended in 2014 after ISIS took control of parts of northern and western Iraq.

Earlier, Iraq’s Deputy Prime Minister for Energy Affairs and Oil Minister Hayyan Abdul-Ghani called the deal a “major achievement” for both Iraq’s oil sector and BP after years of stagnation.