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Iraq Signs Deal with BP to Develop Kirkuk Oil and Gas Fields

This handout picture released by Iraq's Prime Minister's Media Office on August 1, 2024, shows him (C) looking on as BP CEO, Murray Auchincloss, (L) and Iraq's Minister of Oil, Hayan Abdul Ghani al-Sawad, sign a memorandum of understanding to develop four oil fields in Kirkuk. (Photo by IRAQI PRIME MINISTER'S PRESS OFFICE / AFP)
This handout picture released by Iraq's Prime Minister's Media Office on August 1, 2024, shows him (C) looking on as BP CEO, Murray Auchincloss, (L) and Iraq's Minister of Oil, Hayan Abdul Ghani al-Sawad, sign a memorandum of understanding to develop four oil fields in Kirkuk. (Photo by IRAQI PRIME MINISTER'S PRESS OFFICE / AFP)
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Iraq Signs Deal with BP to Develop Kirkuk Oil and Gas Fields

This handout picture released by Iraq's Prime Minister's Media Office on August 1, 2024, shows him (C) looking on as BP CEO, Murray Auchincloss, (L) and Iraq's Minister of Oil, Hayan Abdul Ghani al-Sawad, sign a memorandum of understanding to develop four oil fields in Kirkuk. (Photo by IRAQI PRIME MINISTER'S PRESS OFFICE / AFP)
This handout picture released by Iraq's Prime Minister's Media Office on August 1, 2024, shows him (C) looking on as BP CEO, Murray Auchincloss, (L) and Iraq's Minister of Oil, Hayan Abdul Ghani al-Sawad, sign a memorandum of understanding to develop four oil fields in Kirkuk. (Photo by IRAQI PRIME MINISTER'S PRESS OFFICE / AFP)

Iraq has signed a preliminary agreement with British energy group BP to develop the northern Kirkuk oil and gas fields, the Iraqi prime minister's office said on Thursday.
Under the deal, which was signed in Baghdad between Iraq's oil minister Hayan Abdel-Ghani and BP CEO Murray Auchincloss, BP will develop four oil and fields in the Kirkuk region, the statement from the Iraqi prime minister's office said.
BP will start drawing up a major plan to boost output capacity of crude oil and gas from Kirkuk, Bai Hasan, Jambour and Khabbaz fields, Iraq oil ministry officials said.
The Kirkuk field's reservoir was discovered in 1927 and is where Iraq's oil industry was founded, reported Reuters.
Iraq, the second biggest producer in the Organization of the Petroleum Exporting Countries behind Saudi Arabia, currently has the capacity to produce almost 5 million barrels per day.

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BP Nears Deals for Oil Fields, Curbs on Gas Flaring in Iraq

British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
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BP Nears Deals for Oil Fields, Curbs on Gas Flaring in Iraq

British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)

Iraq and British oil giant BP are set to finalize a deal by early February to develop four oil fields in Kirkuk and curb gas flaring, Iraqi authorities announced Wednesday.

The mega-project in northern Iraq will include plans to recover flared gas to boost the country's electricity production, they said.

Gas flaring refers to the polluting practice of burning off excess gas during oil drilling. It is cheaper than capturing the associated gas.

The Iraqi government and BP signed a new memorandum of understanding in London late Tuesday, as Prime Minister Mohammed Shia al-Sudani and other senior ministers visit Britain to seal various trade and investment deals.

"The objective is to enhance production and achieve optimal targeted rates of oil and gas output," Sudani's office said in a statement.

Iraq's Oil Minister Hayan Abdel Ghani told AFP after the new accord was signed that the project would increase the four oil fields' production to up to 500,000 barrels per day from about 350,000 bpd.

"The agreement commits both parties to sign a contract in the first week of February," he said.

Ghani noted the project will also target gas flaring.

Iraq has the third highest global rate of gas flaring, after Russia and Iran, having flared about 18 billion cubic meters of gas in 2023, according to the World Bank.

The Iraqi government has made eliminating the practice one of its priorities, with plans to curb 80 percent of flared gas by 2026 and to eliminate releases by 2028.

"It's not just a question of investing and increasing oil production... but also gas exploitation. We can no longer tolerate gas flaring, whatever the quantity," Ghani added.

"We need this gas, which Iraq currently imports from neighboring Iran. The government is making serious efforts to put an end to these imports."

Iraq is ultra-dependent on Iranian gas, which covers almost a third of Iraq's energy needs.

However, Teheran regularly cuts off its supply, exacerbating the power shortages that punctuate the daily lives of 45 million Iraqis.

BP is one of the biggest foreign players in Iraq's oil sector, with a history of producing oil in the country dating back to the 1920s when it was still under British mandate.

According to the World Bank, Iraq has 145 billion barrels of proven oil reserves -- among the largest in the world -- amounting to 96 years' worth of production at the current rate.