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

Iraq and British oil giant BP (BP.L) are set to finalize a significant agreement covering four oil and gas fields in Kirkuk by early February, according to Oil Minister Hayan Abdel-Ghani during his visit to Britain. He noted that the deal would surpass the scale of a 2023 agreement with TotalEnergies in Basra, which was valued at approximately $27 billion.

Iraq's state news agency reported on Wednesday that Baghdad and BP had signed a preliminary agreement to explore the potential redevelopment of the Kirkuk oil and gas field, along with neighboring fields, though further details were not disclosed.

Oil Minister Hayan Abdel-Ghani stated that the agreement would increase oil production by up to 150,000 barrels per day (bpd) and include a gas production component. He noted that the additional oil output would supply refineries in the northern region, which are currently underutilized.

“These are significant investments,” Abdel-Ghani remarked.

BP has not yet provided a comment on the matter.

Iraq is focused on enhancing gas production and capture to eliminate the environmentally harmful practice of flaring excess gas from oil production by 2028.

In December, BP and Iraq agreed on the technical terms for redeveloping the Kirkuk oil fields.

As OPEC's second-largest oil producer after Saudi Arabia, Iraq has a production capacity of nearly 5 million barrels per day (bpd).

Unlike previous contracts that provided foreign companies with minimal profit margins, the new agreements are expected to feature a more favorable profit-sharing structure, according to sources cited by Reuters.

BP was part of the consortium of oil companies that discovered oil in Kirkuk in the 1920s and has estimated that the region contains approximately 9 billion barrels of recoverable oil.

The company also holds a 50% stake in a joint venture managing the massive Rumaila oilfield in southern Iraq, where it has been operating for over a century.