25th Feb 2025 14:47
(Alliance News) - BP PLC on Tuesday said it has reached agreement with the Iraq government on the contractual terms for investment in "several giant oil fields" in near the city of Kirkuk in the north of the country.
The London-based oil major said the agreement, which requires endorsement by the Iraq Council of Ministers, involves setting up a new operator that will include personnel seconded from BP. The new unincorporated organisation will take over operation of the Kirkuk, Bai Hassan, Jambur and Khabbaz fields from North Oil Co.
BP will be remunerated based on incremental production volumes, price and costs. It will be able to book a share of production and reserves proportionate to the fees it earns for helping to increase production.
The agreement follows an accord signed back in July of last year. The technical terms for this were agreed in December and most of the commercial terms last month.
The agreement calls for an initial development phase targeting oil and gas production of more than 3 billion barrels of oil equivalent. The work to achieve this will include a drilling programme, the rehabilitation of existing wells and facilities, and the construction of new infrastructure, including for gas production.
The resource opportunity across the contract and surrounding area is believed to be up to 20 billion barrels of oil equivalent, according to BP, which noted that it was a member of the consortium of oil companies that discovered oil in Kirkuk in the 1920s.
BP shares were down 0.4% to 444.60 pence in London on Tuesday afternoon.
By Tom Waite, Alliance News editor
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