On February 25, BP reached an agreement with the Iraqi government on investment in four giant oil fields in the Kirkuk region, including the rehabilitation and redevelopment of existing production facilities and supporting infrastructure. The total investment could reach as much as 25 billion U.S. dollars. The agreement still requires final approval by the Iraqi government.

According to the agreed-upon procedure, BP will participate in the establishment of a new operating entity under the coordination of the Iraqi government. This entity will be primarily composed of personnel from the Northern Oil Company (NOC) and the Northern Gas Company (NGC), supplemented by BP’s assigned expert team, and will take full control of operations at the Kirkuk oilfield. Subsequently, BP plans to hold its stake in the new operating entity through the establishment of an independent joint venture.

This agreement represents a substantive advancement of the Memorandum of Understanding signed by both parties in July 2024. Specifically, the technical provisions were finalized last December, and the core commercial terms were largely agreed upon by January of this year.

The development scope covers the Baba and Avanah domes, the Bai Hassan oilfield, the Jambur oilfield, and the Khabbaz oilfield.

The initial development phase of the project is expected to exceed 3 billion barrels of oil equivalent. It is believed that the resource potential reserves within the entire contract area and its surrounding radiation zones could reach as high as 20 billion barrels of oil equivalent.

According to a senior Iraqi official, the contract period will exceed 25 years, and BP will invest approximately $20–25 billion throughout the project’s entire lifecycle, with a particular focus on the reconstruction and upgrading of the four major oil and gas fields mentioned above.

He stated that, according to the agreement, BP will increase the daily crude oil production capacity of the four major oilfields by 150,000 barrels within two to three years, bringing the total capacity to at least 450,000 barrels per day.

William Lin, bp’s Executive Vice President, stated: “As one of the world’s most resource-rich oil and gas regions, Kirkuk requires large-scale development expertise. We will work closely with NOC and NGC to fully leverage bp’s technological strengths in managing ultra-large oilfields and maximize asset value.”

The agreement stipulates that BP will work together with NOC and NGC to implement a capacity-enhancement plan, which includes conducting systematic drilling operations, rehabilitating existing production facilities, and building new supporting infrastructure such as natural gas processing facilities.

It is worth noting that BP’s investment return mechanism will adopt a dynamically adjusted model, directly linked to the scale of increased production, oil price fluctuations, and cost expenditures. According to the agreement, BP will acquire corresponding rights to production and reserves proportional to its share of the revenues generated from its enhanced production services.

The project is expected to bring significant economic benefits to the Kirkuk region, including job creation, enhanced supply-chain capabilities, and improved living standards for local residents.

BP emphasized that the investment proposal strictly adheres to the company’s financial management framework and meets the requirements for investment returns. The project will be officially launched within this year.