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Iraq, BP Sign Kirkuk Oilfield Contract

Iraq, BP Sign Kirkuk Oilfield ContractIraq, BP Sign Kirkuk Oilfield Contract

Iraq’s state-run North Oil Company signed an agreement with BP on Monday to triple output from the Kirkuk fields in the north of the country, Oil Minister Jabar al-Luaibi said.

The agreement was signed in the southern Iraqi city of Basra, he told a news conference after the signing, Reuters reported.

Under the deal, BP will boost output capacity from six fields in the Kirkuk region to a total of more than 1 million barrels per day, three times today’s capacity in the region.

The oilfields were returned to Baghdad’s control in October after Iraqi government forces dislodged Kurdish fighters from the area. The minister began talks with BP in October, days after the Kurdish fighters were expelled.

Oil exports from the region, transported by pipeline to Turkey, were halted after the Iraqi military operation, which was launched in retaliation against an independence referendum held on Sept. 25 by the semi-autonomous Kurdistan Regional Government.

Iraq plans to start trucking crude from Kirkuk to Iran, but the road to the border has yet to be secured from attacks by the self-styled Islamic State terrorist group.

BP had agreed in 2013 to help Baghdad halt a sharp decline in output from Kirkuk.

Kirkuk is one of the biggest and oldest oilfields in the Middle East, estimated to contain about 9 billion barrels of recoverable oil, according to BP.

BP has provided technical assistance in the past to North Oil Company to help redevelop the Kirkuk field.

Iraq, the second biggest producer in the Organization of Petroleum Exporting Countries behind Saudi Arabia, has the capacity to produce 5 million bpd, but now produces 4.45 million bpd to comply with an OPEC-led deal to curb supplies.

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