BP finalises deal with Iraq to redevelop Kirkuk oil fields

(Sharecast News) - Oil major BP has finalised a deal with Iraq to redevelop several giant oil fields in Kirkuk, in the north of the country, the company said on Wednesday. The agreement is for an initial phase that includes oil and gas production of more than 3 billion barrels of oil equivalent (boe), BP said in a statement.

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 boe.

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. 

BP said it would work under the guidance of the government to set up a new operator - an unincorporated organisation comprising predominantly personnel from NOC and NGC, but also with secondees from BP - to prepare for the initial stages of development.

As part of the agreement, BP's remuneration will be linked to incremental production volumes, price and costs. The company will be able to book a share of production and reserves proportionate to the fees it earns for helping to increase production.

Reporting by Frank Prenesti for Sharecast.com