The energy giant’s announcement of the tie-up comes as it finalises plans to ditch renewables targets set under previous CEO.
The agreement between BP and Iraq’s government will focus on the redevelopment of four large oil and gasfields in Kirkuk in the north of the country.
The agreement follows a memorandum of understanding between BP and Iraq signed in July 2024 – of which technical terms were agreed in December and the majority of commercial terms agreed in January – together with previous work that BP has done on the fields in Kirkuk from 2013 to 2019.
The deal, which could be worth $25 billion(€23.8bn) over the lifetime of the project, comes as BP is set to row back on previous targets to cut oil and gas production by 2030.
It’s also a major achievement of Iraq where output has been constrained by years of war, sectarian tensions and corruption.
In a statement BP said that the agreement was for an initial phase that would include oil and gas production of more than three billion barrels of oil equivalent.
It includes the Baba and Avanah domes of the Kirkuk oil field and three adjacent fields: Bai Hassan, Jambur and Khabbaz.
Untapped potential for 20 billion barrels of oil
BP added that the wider resource opportunity across the contract and surrounding area is believed to include up to 20 billion barrels of oil equivalent.
BP executive vice president William Lin said: “This agreement builds on our longstanding and strategic relationship with the Government of Iraq and delivers access to a material new resource opportunity, within one of the world’s most prolific hydrocarbon provinces.
“It will enable us to bring our experience of managing giant fields to realise the potential of this important asset for Iraq.”
He added: “This opportunity is fully in line with our priority of pursuing new growth opportunities for bp as we strengthen and high-grade our portfolio across the world.”
Major shift in BP strategic aims
The British multinational is currently undergoing a reset of a green strategy set under its previous CEO Bernard Looney which aimed at focusing the company more on renewable energy.
At an event in London this morning, Looney’s successor, Murray Auchincloss, announced a major pivot away from green targets.
He said: “Today we have fundamentally reset BP’s strategy. We are reducing and reallocating capital expenditure to our highest-returning businesses to drive growth, and relentlessly pursuing performance improvements and cost efficiency. This is all in service of sustainably growing cash flow and returns.”
