Iraqi oil minister: Iraq and BP will sign Kirkuk oil deal in first week of February
Iraq and British oil giant BP will be signing a mammoth agreement covering four Kirkuk gas and oil fields by the 1st week of February. This was revealed by Oil Minister Hayan Abdul-Ghani during a trip to Britain.
He said the deal would be bigger than a TotalEnergies 2023 Basra deal, which was valued at around $27 billion.
Iraq's official news agency reported on Wednesday that Baghdad had signed a preliminary deal with BP to evaluate the feasibility of redeveloping Kirkuk and its neighboring oil and gas fields. However, the report did not provide any further details.
Abdel-Ghani stated that the oil production could be increased by as much as 150,00 barrels a day (bpd), under this deal. The agreement also included a component for gas.
He added that the oil would be sent to refineries currently under-utilized in the North.
He said, "These are large investments."
BP didn't immediately respond to a comment request.
Iraq wants to increase gas production and capture in order to end the environmentally harmful practice of flaring (burning excess gas produced from oil production) by 2028.
BP and Iraq signed a technical agreement in December to redevelop Kirkuk's fields.
Iraq is the second largest oil producer within the Organization of Petroleum Exporting Countries.
Sources have said that unlike historic contracts, which offer foreign companies razor thin margins, new agreements will include a generous profit sharing model.
BP was a part of the oil consortium that discovered oil at Kirkuk in 1920. It has estimated the area to hold about 9 billion barrels worth of recoverable crude oil.
The company has a 50% share in a joint-venture that operates the Rumaila oilfield, a giant oilfield located in the southern part of the country. It has been there for over a century. (Reporting and editing by David Goodman.)
(source: Reuters)
