ConocoPhillips (NYSE:COP) has agreed to acquire a 42% stake in BP Plc’s (NYSE:BP) development subsidiary covering four major oilfields in the Kirkuk region of northern Iraq. The partnership aims to rehabilitate and optimize production at a cost of approximately $25 billion.
This deal marks ConocoPhillips' return to Iraq for the first time in over a decade and aligns with Baghdad’s goal to expand U.S. energy investments.
The Development and Production Contract (DPC) targets an initial phase aiming to extract more than 3 billion barrels of oil equivalent. Both firms expect the joint venture to function as an equity affiliate, requiring no significant upfront capital contributions from the companies while returns will link proportionally to incremental production volumes and costs.
Current state operators Northern Oil Company and Northern Gas Company will retain their active roles.
Iraqi Prime Minister Ali Al-Zaidi recently pitched major energy deals to Western majors like ConocoPhillips and Chevron Corp. (NYSE:CVX) to counter the dominant presence of Chinese firms in Iraq's energy landscape.
The century-old Kirkuk fields have suffered long-term output declines exacerbated by regional conflict.
The super-giant Kirkuk oil field in northern Iraq is undergoing a major $25 billion redevelopment led by BP and ConocoPhillips to boost recoverable resources and production.
