26th Mar 2025 14:00
(Alliance News) - BP PLC on Wednesday announced it has received final government ratification for its contract to invest in the redevelopment of several "giant" oil fields in Kirkuk, northern Iraq.
The London-based oil major said the contract between North Oil Co, North Gas Co and BP includes the rehabilitation and redevelopment of the fields, which span oil, gas, power and water with potential for investment in exploration.
BP Chief Executive Officer Murray Auchincloss said: "BP has a decades-long history in Iraq, and we look forward to building on this as we embark on our next chapter of production in the country."
He added: "From signing a memorandum of understanding last year to now fully completing our agreement, we’re looking forward to getting to work. Together with our partners, we aim to deliver world-class operations, combining deep local knowledge with our expertise in managing giant fields and safely executing major projects."
BP will work under the guidance of the Iraqi government to set up a new operator, which will be an unincorporated organisation comprising mostly of personnel from North Oil Co and North Gas Co. It will also include secondees from BP.
With the setting up of a new operator, the companies prepare for the initial stages of development.
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 three 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 rose 1.5% to 448.45 pence each on Wednesday afternoon in London.
By Tom Budszus, Alliance News slot editor
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