BP and Iraq agree on technical terms for redeveloping Kirkuk oilfields

The British oil giant BP announced on Thursday that it had reached an agreement with the Iraqi Government on the technical conditions for redeveloping the Kirkuk Oil and Gas Fields.

In August, the company signed an agreement to explore and develop the Kirkuk oilfield located in the north of Iraq. This will include the construction of solar power plants and other energy infrastructure.

Sources have said that unlike historic contracts, which offer foreign companies razor thin margins, new agreements will include a generous profit sharing model.

Iraq is the second largest oil producer after Saudi Arabia in the Organization of Petroleum Exporting Countries. It has the ability to produce 5 million barrels of oil per day.

BP was a part of the oil consortium that discovered oil at Kirkuk in 1920. BP estimates that the Kirkuk oil field contains about 9 billion barrels worth of recoverable crude.

William Lin, executive vice president of BP, said in a press release that "today's signing represents an important step towards a fully-term contract". Negotiations are expected to be completed by the company in early 2025.

The company has a 50% share in a joint-venture that operates the Rumaila oilfield, located in the southern part of the country. It has been there for over a century.

The Iraqi government has not responded to a comment request on the development of Thursday. (Reporting by Arunima Kumar in Bengaluru; Editing by Arun Koyyur)

(source: Reuters)