Iraq, BP agree to rehab oil, gas fields in Kirkuk

ERBIL, Kurdistan Region - The Iraqi oil ministry and energy giant British Petroleum (BP) signed a “comprehensive” memorandum of understanding (MoU) on Thursday to rehab several state-owned oil and gas fields in Kirkuk province.

Iraq Oil Minister Hayyan Abdul-Ghani and BP CEO Murray Auchincloss signed the agreement in a ceremony presided over by Iraqi Prime Minister Mohammed Shia’ al-Sudani.

Avana, Bai Hassan, Qubbat Baba, Jambour, and Khabaza fields in Kirkuk will be rehabilitated and developed according to the memorandum, which also includes the possibility of reaching related future agreements.

The fields are operated by the state-run North Oil Company (NOC). The NOC is one of the 16 companies comprising the Iraqi oil ministry with its headquarters in Kirkuk. 

The MoU comes “in light of the [Iraqi] government's efforts to optimally invest in promising opportunities in the energy sector, with the aim of increasing and enhancing oil production and gas and solar energy investments in this region,” according to a statement from Sudani’s office.

Kirkuk is a multi-ethnic and home to Kurds, Arabs, and Turkmen. Kirkuk and other territory in the provinces of Diyala, Nineveh, and Salahaddin are disputed or Article 140 areas long claimed by both Iraq and Kurdistan.

BP has been working in Kirkuk’s oil fields since the Iraqi federal government’s return to power in Kirkuk in October 2017. Previously, Kurdish factions had controlled oil fields in Kirkuk, following the collapse of the Iraqi army in 2014 during the fight against the Islamic State (ISIS). 

Oil exports through the Kirkuk-Ceyhan pipeline have been halted since March 2023 after a Paris-based arbitration court ruled in favor of Baghdad and against Ankara, saying the latter had breached a 1973 pipeline agreement by allowing Erbil to begin independent oil exports in 2014.

Before the halt, around 400,000 barrels per day were being exported by Erbil, in addition to some 75,000 barrels of Kirkuk’s oil.

In late May, Sudani called on the oil ministry to study linking its projects with the use of the Development Road - a multi-billion dollar project stretching from southern Iraq to its northern border with Turkey, aiming to link the Persian Gulf with Turkey. The project would significantly enhance Iraq’s geopolitical position and generate economic gains for Baghdad.