WPB: A senior Iraqi petroleum official has predicted that British Petroleum (BP) may invest up to $25 billion over the lifespan of a redevelopment project for four petroleum and gas fields in Kirkuk.
If a deal is signed between the two parties—something that, according to the official, could happen in the coming weeks—it would mark a significant step forward for Iraq, whose petroleumproduction has long been plagued by war, corruption, and other challenges.
The Iraqi official stated that BP is set to invest between $20 billion and $25 billion in a profit-sharing agreement that will last over 25 years. The value of this contract had not been previously disclosed.
BP declined to comment on the latest developments but referred to a statement released last month, in which it noted significant progress in discussions with the Iraqi government to support the operator of several Kirkuk petroleum fields in an integrated development project.
Following the $27 billion deal with TotalEnergies, Iraq’s upcoming contract with BP would be the second-largest agreement between Baghdad and an international petroleumcompany in recent years.
Iraq’s domestic energy needs
BP’s agreement will focus on rebuilding infrastructure across four petroleum fields and developing natural gas production to support Iraq’s domestic energy needs.
The official stated that technical and financial negotiations are progressing well and that final contracts could be signed by the end of this week.
According to the source, BP plans to increase crude oil production from the four Kirkuk fields by 150,000 barrels per day (bpd), bringing the total output to at least 450,000 bpd within two to three years.
Three officials from Iraq’s state-run North Oil Company (NOC) confirmed that this would be a substantial increase from the current production capacity of 300,000 bpd.
The senior petroleum official also explained that under the proposed profit-sharing model, BP would be able to recover its costs and generate profits once production surpasses current levels.
According to a Reuters report, BP has extensive knowledge of the Kirkuk fields. The company was part of the consortium that discovered petroleum in Kirkuk in the 1920s and estimated that the region contains approximately 9 billion barrels of recoverable petroleum.
By Bitumenmag
Petroleum, Bitumen, Oil, Gas
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