British oil major BP has finalised the technical terms with the Iraqi government for redeveloping the Kirkuk oil and gas fields.
In August, it signed an agreement with Iraq to develop and explore the Kirkuk oilfield, including plans to build power plants and solar capacity, Reuters reported.
Iraq, the second-largest oil producer in Opec, has a production capacity of almost 5 million barrels per day (bpd) and plans to increase it to 6 million by 2028.
“Today’s signing is an important step toward a fully termed contract,” said BP executive vice president William Lin, expecting the negotiations to be completed in early 2025.
The new agreement is anticipated to feature a more favourable profit-sharing model, sources told Reuters.
The Iraqi government is striving to bring back foreign oil companies after it saw their exodus, due to unfavourable investment environment, and delays in payments for the services.
London-listed BP estimates the Kirkuk oilfield holds 9 billion barrels of recoverable oil.
Earlier this year, the British major signed a preliminary agreement to rehabilitate and develop four oil and gas fields in the political sensitive Kurds-claimed province: Kirkuk (domes Baba and Avanah), Bai Hasan, Jambour, and Khabbaz.
The fields are operated by the Iraq National Oil company, but their production declines.
BP also holds a 50 percent stake in a joint venture operating the Rumaila oilfield in southern Iraq, the country’s largest oil field.
The stake is large, if low-margin, while recent discussions over Kirkuk – whose discovery in 1927 opened BP’s history in Iraq – offers growth, Robin Mills wrote in AGBI this month.
In October, the British energy giant was reported to be in talks for new investments in Iraq and Kuwait as it refocuses on oil and gas.
