British Prime Minister Keir Starmer was to meet his Iraqi counterpart Mohammed Shia al-Sudani on Tuesday for talks on trade, security and migration, in a visit hailed as a “new era” in ties. [Getty]
Iraq and British oil giant BP have signed a major deal to redevelop four key oil and gas fields in Kirkuk. On Wednesday, Iraq’s State News Agency (INA) confirmed that Baghdad and BP finalised the agreement to evaluate and execute the redevelopment of Kirkuk’s oil and gas fields and adjacent areas.
The deal aims to raise oil production by up to 150,000 barrels per day (bpd) and includes significant gas components, Iraq’s Oil Minister Hayan Abdel-Ghani told Reuters.
“These are big investments,” Abdel-Ghani noted, emphasising that the additional oil would help supply refineries in northern Iraq that are currently underutilised. The minister also highlighted Iraq’s broader aim to boost gas production and eliminate the environmentally damaging practice of flaring excess gas by 2028.
The agreement is poised to surpass the scale of a $27 billion deal Iraq inked with TotalEnergies (TTEF.PA) in Basra in 2023. BP, which has yet to comment on the agreement, was a pioneer in the discovery of Kirkuk’s oil fields in the 1920s and has estimated the area holds approximately 9 billion barrels of recoverable oil. The company also operates the massive Rumaila oilfield in southern Iraq through a joint venture in which it holds a 50 percent stake.
British Prime Minister Keir Starmer met his Iraqi counterpart Mohammed Shia al-Sudani on Tuesday for talks on trade, security and migration, in a visit hailed as a “new era” in ties.Â
The Kirkuk redevelopment project reflects a strategic shift in Iraq’s approach to oil contracts. Unlike older agreements offering slim margins to foreign companies, the new deals are expected to feature more lucrative profit-sharing models, according to sources familiar with the matter. This is part of Iraq’s effort to modernise its oil sector and attract substantial foreign investment.
Kirkuk oil production and regional implications
Current oil production in Kirkuk stands at 360,000 bpd, with the North Oil Company targeting an increase to 400,000 bpd. With BP’s involvement, production could soar to nearly 800,000 bpd, said Ali Hama Salih, head of the National Stance Opposition Party in the Kurdistan Region, in comments to The New Arab.
In a post on his Facebook page on Wednesday, Salih warned of significant regional consequences, particularly for the Kurdistan Region. He said that legal actions by the Iraqi authorities are underway to secure control of three major fields in Kirkuk—Khurmala, Havana, and Kormor—which are under the control of the Kurdish authorities and could undermine the region’s claim to vital oil and gas resources.
“Instead of threats and efforts to attack the Iraqi government, the rational choice is to seek agreements,” Salih wrote on his Facebook page.
Salih has called for the Iraqi Kurdistan Region’s oil to be handed over to Iraq’s State Oil Marketing Organisation (SOMO) and for equitable budget allocations to be codified into law within three months. He also stressed the need to combat cross-border smuggling and to reinstate domestic revenue provisions outlined in Iraq’s Financial Management Law.
With Iraq‘s capacity to produce nearly 5 million bpd, the Kirkuk redevelopment project is expected to further solidify its position as OPEC’s second-largest oil producer. The agreement with BP underscores Iraq’s commitment to enhancing its energy sector while addressing environmental concerns and regional economic disparities.
