bp has received final government ratification for its contract to invest in the redevelopment of several giant oil fields in Kirkuk, in the north of Iraq.

The contract between North Oil Company (NOC), North Gas Company (NGC) and bp includes the rehabilitation and redevelopment of the fields, spanning oil, gas, power and water with potential for investment in exploration.

The final agreement was signed in a meeting in Baghdad with Iraq Prime Minister H.E. Mohammed Shia' Al Sudani, H.E. Hayan Abdul Ghani, Deputy PM for Energy Affairs and Minister of Oil, and bp chief executive Murray Auchincloss, together with Nader Zaki, bp regional president for Middle East and North Africa, and Zaid Elyaseri, bp President Iraq.

“bp has a decades-long history in Iraq, and we look forward to building on this as we embark on our next chapter of production in the country,” said Murray Auchincloss. “From signing a memorandum of understanding last year to now fully completing our agreement, we’re looking forward to getting to work. Together with our partners, we aim to deliver world-class operations, combining deep local knowledge with our expertise in managing giant fields and safely executing major projects.

“This is an enormous opportunity as we grow bp’s oil and gas business and fully aligned with our strategy of strengthening our upstream portfolio.”

Now that the agreement has full approval, bp will work under the guidance of the Government to set up a new operator – an unincorporated organization comprising predominantly personnel from NOC and NGC, but also with secondees from bp – to prepare for the initial stages of development.

The agreement is for an initial phase that includes oil and gas production of more than 3 billion barrels of oil equivalent. It includes the Baba and Avanah domes of the Kirkuk oil field and three adjacent fields in Federal Iraq – Bai Hassan, Jambur and Khabbaz – all of which are currently operated by the NOC. The wider resource opportunity across the contract and surrounding area is believed to include up to 20 billion barrels of oil equivalent.

Notes:

   - As part of the agreement, bp’s remuneration will be linked to incremental production volumes, price and costs. bp will be able to book a share of production and reserves proportionate to the fees it earns for helping to increase production.
   - Investment in the project has the potential to bring opportunity and economic growth into the Kirkuk region – creating tangible benefits for the local population, improving supply chain capability alongside job creation.

About bp

bp (NYSE: BP, LSE: BP.L) is one of the world's largest oil and gas companies, serving millions of customers every day in more than 80 countries, and employing nearly 85,000 people. BP's business segments are oil and gas exploration & production, and refining & marketing. In alternative energies, BP has low- and no-carbon wind and biofuels businesses. Through these activities, BP provides fuel for transportation; energy for heat and light; services for motorists; and petrochemicals products for plastics, textiles and food packaging. It has strong positions in many of the world's hydrocarbons basins and strong market positions in key economies.