Iraq and British oil giant BP are set to finalize a major agreement involving four oil and gas fields in the northern city of Kirkuk in early February, Oil Minister Hayan Abdel-Ghani said Wednesday.
Accompanying Iraqi Prime Minister Mohammed Shia Al Sudani on a visit to the United Kingdom, Abdel-Ghani said it would be larger than a 2023 TotalEnergies deal in Basra, valued at around $27 billion.
Iraq's state news agency said on Wednesday that Baghdad and BP had signed a preliminary agreement to evaluate the possibility of redeveloping the Kirkuk oil and gas field and other neighboring fields without providing further detail.
Abdel-Ghani told Reuters that oil production would be raised by up to 150,00 barrels per day (bpd) under the deal, which also had a gas component.
The oil would flow to refineries in the north currently operating below capacity, he added.
"These are big investments," he said.
Iraq aims to boost gas production and capture, with the aim of ending the wasteful and environmentally damaging practice of burning excess gas from oil production, known as flaring, by 2028.
BP and Iraq reached a deal in December on the technical terms to redevelop the Kirkuk fields.
Iraq, the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia, has the capacity to produce nearly 5 million pbd.
Unlike historic contracts that offer foreign companies razor-thin margins, the new agreements are expected to include a more generous profit-sharing model, sources have told Reuters.
BP was a member of the consortium of oil companies that discovered oil in Kirkuk in the 1920s and has estimated that the area holds about 9 billion barrels of recoverable oil.
The company holds a 50% stake in a joint venture operating the giant Rumaila oilfield in the south of the country, where it has been operating for a century.
