BP pumps $25B into Iraq’s Kirkuk
Shafaq News/ Britishenergy giant BP will invest about $25 billion to redevelop four oil and gasfields in Iraq's Kirkuk under a long-term contract to boost production andsupport local energy infrastructure, an Iraqi oil expert revealed on Monday.
“The agreement with Iraq’s Ministryof Oil is expected to help revive output at the North Oil Company, which hasstruggled since the 2014 ISIS insurgency and subsequent stagnation,” oil expertAli Khalil told Shafaq News, adding that the contract will also contribute tothe development of the North Gas Company and the construction of solar-poweredpower stations.
Khalil said BP’s investment isintended to increase crude oil production from the Kirkuk fields by about150,000 barrels per day (bpd), targeting a total capacity of at least 450,000bpd within two to three years.
According to the expert, Kirkuk’soil output has seen sharp declines over the years. Between 2005 and 2010,production ranged from 600,000 to 725,000 bpd, with around 500,000 bpd exportedto Turkiye’s Ceyhan port. By 2014, production had fallen to 400,000-500,000bpd, dropping further to 250,000-325,000 bpd in the following years due toreduced well productivity.
“BP’s deal, structured as aprofit-sharing agreement lasting over 25 years, will allow the company to recovercosts and start generating profits once production surpasses current levels,”Khalid noted, emphasizing that the partnership will also focus onrehabilitating production facilities and expanding natural gas development tosupport Iraq’s domestic energy needs.
The contract, set to takeeffect in the coming days, includes the redevelopment of the Baba and Avanadomes, Bai Hassan, Jambur, and Khabbaz oil fields. It also covers improvementsto the North Gas Company’s infrastructure, Iraq’s largest state-owned gas firm,which supplies power plants with fuel.
BP, which was part of theconsortium that discovered oil in Kirkuk in the 1920s, previously signed aletter of intent in 2013 to study the Kirkuk fields’ development, but the planwas suspended in 2014 after ISIS took control of parts of northern and westernIraq.
Earlier, Iraq’s Deputy Prime Minister forEnergy Affairs and Oil Minister Hayyan Abdul-Ghani called the deal a “major achievement”for both Iraq’s oil sector and BP after years of stagnation.
