BP Plc, the British oil and gas giant, is set to develop Iraq’s Kirkuk oil and gas fields under a profit-sharing arrangement, according to officials from Iraq’s oil ministry. The deal is expected to be formalized this week with the signing of a confidentiality agreement. Following this, Iraq will provide BP with detailed data on Kirkuk’s four fields and associated infrastructure.
Currently, the Kirkuk oil fields produce about 245,000 barrels of crude oil per day. As OPEC’s second-largest oil producer after Saudi Arabia, Iraq heavily relies on oil exports, which constitute over 90 percent of its national revenue.
In May, French multinational TotalEnergies reached a deal with the Iraqi government to kickstart a long-stalled $27 billion energy project. TotalEnergies initially signed the agreement in 2021 to develop four oil, gas, and renewable energy projects in southern Iraq over 25 years, with an initial investment of $10 billion. The project faced delays due to political disputes in Iraq. However, a revised agreement now includes a smaller 30% stake for Iraq, potentially attracting renewed foreign investment. Following years of instability, Iraq has experienced relative calm, increasing the likelihood of foreign investors returning.
TotalEnergies CEO Patrick Pouyanne expressed satisfaction with the agreement, stating, “The government of Iraq confirmed the whole contract, no modification at all … so that was for me more than good news,” in an interview with Reuters.
In another development, Iraq may soon resume oil exports through a pipeline to the Turkish port of Ceyhan on the Mediterranean coast. Exports were halted on March 25 when Turkey stopped Iraq’s 450,000 barrels per day due to a ruling requiring Turkey to pay Iraq $1.5 billion for unauthorized exports by the Kurdish Regional Government (KRG). The Iraqi oil ministry, Kurdistan’s Ministry of Natural Resources, and international oil companies met in Baghdad in June to discuss restarting production and exports.
“We have made progress in today’s talks, and we expect to reach an understanding in a few days,” said Hayan Abdul Ghani, Iraq’s oil minister.