On Thursday, the Iraqi government signed a memorandum of understanding with BP (British Petroleum) aimed at developing the Kirkuk oil fields. According to Reuters, the Iraqi Ministry of Oil announced in a statement that Jabbar al-Luiebi, the Minister of Oil, signed the development agreement for the Kirkuk oil fields with Michael Townshend, BP's President for the Middle East, at the Northern Oil Company office. Following the independence referendum in the Kurdistan region on September 25, 2017, the central government of Iraq deemed this action illegal and demanded that the Kurdistan region hand over all border crossings to the central government. Baghdad also took control of the Kirkuk region by sending its forces. The Iraqi Ministry of Oil states that under this memorandum, BP will increase the production capacity of the Kirkuk oil fields to 750,000 barrels per day, which is double the current capacity. The Ministry's statement mentioned that BP will conduct exploratory operations through seismic surveys and will begin its studies for the development of the Kirkuk oil fields. The Iraqi Minister of Oil had initiated negotiations for the development of the Kirkuk oil fields just a few days after Baghdad regained control over Kirkuk. Oil exports from the Kirkuk pipelines to Turkey were halted by the central government following the Kurdistan independence referendum. Iraq plans to transfer Kirkuk crude oil to Iran for refining by tanker at the end of this month. On January 6, the Iraqi Minister of Oil announced that the country would likely send about 30,000 barrels daily by truck to the Kermanshah refinery before the end of January. Iran and Iraq have agreed to swap a maximum of 60,000 barrels per day of Kirkuk oil with Iranian oil, with Iran exporting the same amount to southern Iraq. BP had reached an agreement with Iraq in 2013 for the development of the Kirkuk field, but a year later, following the ISIS attack and the defeat of the Iraqi army, the Kurdistan region's forces took control of the city and prevented ISIS from seizing the oil wells. The Kirkuk oil fields are among the largest and oldest oil fields in the Middle East, and according to BP's assessment, there are still 9 billion barrels of extractable oil. According to Jabbar al-Luiebi, Iraq's oil production capacity has now approached 5 million barrels per day, but according to OPEC quotas, the country produces 4.4 million barrels of oil daily. Iraq is the second-largest oil producer in the world after Saudi Arabia.
Iraq Reaches Agreement with BP for Development of Kirkuk Oil Fields
Iraq has signed a deal with BP to develop the Kirkuk oil fields, aiming to double production capacity. This agreement comes after Iraq regained control over Kirkuk following a controversial independence referendum in the Kurdistan region. The deal is significant as it impacts Iraq's oil production and its relations with neighboring Iran.
👥 Key Players
📰 What Happened
Iraq signed a memorandum of understanding with BP to develop the Kirkuk oil fields, aiming to double production capacity to 750,000 barrels per day. This agreement follows Iraq's regained control over Kirkuk after a controversial independence referendum in the Kurdistan region.
- BP will conduct exploratory operations and seismic surveys for the Kirkuk oil fields.
- Iraq plans to transfer Kirkuk crude oil to Iran for refining, indicating a cooperative energy relationship.
💡 Why It Matters
📚 Background
The Kirkuk oil fields have been a focal point of conflict between the Iraqi central government and the Kurdistan region, especially following the 2017 independence referendum. Iraq is a major oil producer, second only to Saudi Arabia.
🏷️ Entities Mentioned
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