ConocoPhillips (NYSE:COP) 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, with the partnership aiming to rehabilitate and optimize production at a cost of ~$25 billion. The deal brings ConocoPhillips back 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.
Discovered in 1927 at Baba Gurgur, the super-giant Kirkuk oil field contains over 3 billion barrels of initial gross recoverable resources and remains the cornerstone of northern Iraqi oil output. The field has historically produced up to 1 million barrels per day, but currently produces between 285,000 and 330,000 barrels per day, largely for domestic consumption. However, Iraq’s North Oil Company successfully restarted crude oil exports of 250,000 barrels per day via the Kirkuk-Ceyhan pipeline to Turkey in March 2026, following nearly three years of suspension. Historically dependent on the Kirkuk–Ceyhan Oil Pipeline to transit crude north through Turkey, Iraq has actively sought diversified routes to bypass maritime chokepoints like the Strait of Hormuz. This includes multi-government initiatives backed by the U.S. to reconstruct the long-dormant, 800-kilometer Kirkuk–Baniyas pipeline directly through Syria to the Mediterranean coast.
Alex Kimani for Oilprice.com
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