BP signs development deal with Iraq
(Article from Charles Bright)
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BP has signed an initial agreement with the Iraqi government to ramp up production from the giant Kirkuk oilfield in Iraqi Kurdistan, as reported by the Financial Times (FT) on Friday.

The memorandum of understanding (MoU) was signed in Kirkuk on Thursday by BP’s Head of Middle East Operations, Michael Townsend.

Production from Kirkuk, the biggest oilfield in the world when it was discovered in the 1920s, has been badly hit in recent years due to regional conflict and consequent neglect and under-investment. The Iraqi oil ministry hopes to increase output to 750 000 bpd.

Alan Mohtadi, Head of T&S Consulting Energy and Security, which advises companies with interests in the Kurdish oil and gas sector, said: “The fields in Kirkuk have a [current] capacity of about 450 000 bpd at the moment but are only producing around 150 000 bpd.”

The Iraqi government first approached BP in October, following the recapture of the region from Kurdish forces. BP said on Thursday that it would be providing the government-controlled North Oil Company with modern technology and expertise that would allow for the long-term redevelopment of the field.

BP and Baghdad signed a previous deal for Kirkuk in 2013, but the work never started and was opposed by the Kurdistan Regional Government (KRG). In 2014 the KRG captured the oilfield after it was abandoned by Iraqi government forces following the capture of the city of Mosul by Isis. However, after the KRG’s independence referendum in October, which was fiercely opposed by the Iraqi government, Baghdad’s forces pushed Kurdish forces back to the pre-2014 borders.

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