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$25 Billion BP Deal Set to Transform Kirkuk’s Oil Fields

Iraqi Government to Finalize Major Oil and Gas Deal with BP

The Iraqi government is poised to finalize an agreement with British Petroleum (BP) concerning the rehabilitation and investment of four oil and gas fields located in the Kirkuk province, an area known for its disputed status with the Kurdistan Regional Government. According to a reliable source within the Iraqi government, this transaction is expected to mark a significant step in revitalizing foreign investment in Iraq’s oil sector.

This deal is being regarded as the second largest oil investment initiative, second only to a previous agreement with Total Energy worth $27 billion. The anticipated investment from BP is projected to range between $20 billion and $25 billion, aimed at enhancing production capabilities across the designated fields over a partnership period of 25 years.

Details of the Investment and Production Expectations

The agreement with BP will involve a contractual partnership wherein the company is tasked with revitalizing and increasing production from the four oil and gas fields. Currently, production stands at approximately 300,000 barrels per day, and the deal is expected to ramp this figure up to 450,000 barrels per day, thereby substantially boosting Iraq’s oil exports.

Below is a summary of the key aspects of the deal:

Aspect Details
Total Investment $20 billion to $25 billion
Production Increase From 300,000 to 450,000 barrels per day
Partnership Duration 25 years
Expected Announcement Date Coming weeks

The agreement is set to be officially announced in the upcoming weeks, and it includes provisions for BP to cover operational expenses in exchange for a share of the profits generated from the fields.

Federal Government’s Intent and Regional Concerns

Recently, the Iraqi Ministry of Oil has expressed its commitment to modernizing the oil fields in Kirkuk by enhancing technical, economic, and contractual dimensions through ongoing negotiations with BP. However, this initiative has sparked apprehension from the Kurdistan Regional Government (KRG), which fears that the federal government’s actions constitute a unilateral attempt to consolidate control over oil and gas resources in disputed regions, a move they assert could violate the Iraqi constitution.

The outcome of these negotiations and the subsequent deal could have significant implications for the region’s economic landscape and the ongoing tensions between the federal and regional governments concerning resource control.

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