bp and ConocoPhillips have agreed to terms under which ConocoPhillips will acquire a 42% interest in BP Energy Company of Kirkuk Limited. The partnership will support the redevelopment of several large oil and gas fields in the Kirkuk region of northern Iraq.
Following completion, bp will retain a majority interest in BP Energy Company of Kirkuk Limited and remain a significant participant in the contractor group responsible for the project.
The agreement is expected to be signed as part of Iraqi Prime Minister Ali Al-Zaidi’s official visit to Washington, D.C.
The transaction brings together bp’s long-standing experience in Iraq with ConocoPhillips’ technical and operating capabilities across large-scale oil and gas developments.
The companies will participate in a Development and Production Contract covering the Baba and Avanah domes of the Kirkuk oil field.
The contract also includes the adjacent Bai Hassan, Jambur and Khabbaz fields in Federal Iraq.
These assets are currently operated by Iraq’s Northern Oil Company.
The initial development phase covers anticipated oil and gas production totaling more than 3 billion barrels of oil equivalent.
A barrel of oil equivalent is a measurement used to combine expected oil and natural gas volumes based on their approximate energy content.
The contract area also contains additional exploration potential beyond the resources included in the initial development phase.
The partnership is intended to support the modernization and redevelopment of the Kirkuk-area fields while increasing their long-term production potential.
Redeveloping mature oil fields can involve new drilling, reservoir analysis, infrastructure upgrades and the application of technologies intended to improve recovery from existing resources.
The project may also require investment in processing facilities, pipelines and other supporting infrastructure needed to handle future oil and gas production.
bp described Kirkuk as a world-class resource base capable of contributing to Iraq’s long-term energy objectives.
The company said the transaction also reflects its disciplined capital allocation strategy, which prioritizes investments in resources expected to generate sustainable long-term returns.
Bringing ConocoPhillips into the project gives bp an additional partner with experience developing and managing complex oil and gas assets.
The 42% stake provides ConocoPhillips with a significant position in the redevelopment while allowing bp to retain control through its majority ownership.
bp’s relationship with Iraq extends back more than a century.
The company has accumulated decades of technical and operating experience across both northern and southern Iraq.
Its continued participation in BP Energy Company of Kirkuk Limited is intended to maintain that experience within the contractor group as the project moves into its next stage.
The proposed partnership could support Iraq’s efforts to increase production from established fields while extending the productive life of strategic energy assets.
The Kirkuk redevelopment also provides both companies with exposure to a substantial resource base that includes existing production and future exploration opportunities.
KEY QUOTES:
“Kirkuk is a world-class resource base that can support Iraq’s long-term energy ambitions while creating value for both the country and bp. This partnership with ConocoPhillips brings together two great teams and positions us well for the next phase of redevelopment. We’re being deliberate about where we invest, backing high-quality resources that can deliver long-term value for our shareholders.”
Meg O’Neill, Chief Executive Officer of bp
