Key facts
- ConocoPhillips will acquire a 42% stake in BP's development subsidiary for Iraq's Kirkuk region.
- The partnership aims to redevelop the Kirkuk oil fields at an estimated cost of $25 billion.
- The project targets the extraction of over 3 billion barrels of oil equivalent.
- The deal marks ConocoPhillips' return to Iraq after more than a decade.
- Current production from the Kirkuk fields is between 285,000 and 330,000 barrels per day.
BP and ConocoPhillips have entered into a significant partnership to redevelop Iraq's giant Kirkuk oil fields. ConocoPhillips will acquire a 42% stake in BP's development subsidiary, a move that marks the U.S. energy company's return to Iraq after more than a decade. The joint venture aims to rehabilitate and optimize production at the fields, with an estimated investment of approximately $25 billion.
The Development and Production Contract (DPC) for the Kirkuk fields targets an initial phase focused on extracting more than 3 billion barrels of oil equivalent. Both companies anticipate the venture will operate as an equity affiliate, meaning upfront capital contributions will be minimal, and returns will be directly proportional to incremental production volumes and associated costs. The existing operators, Northern Oil Company and Northern Gas Company, will continue their active roles in managing the fields.
This collaboration aligns with Iraqi Prime Minister Ali Al-Zaidi's efforts to attract major energy deals from Western companies like ConocoPhillips and Chevron, aiming to counterbalance the substantial presence of Chinese firms in Iraq's energy sector. The Kirkuk fields, discovered in 1927, have historically been a cornerstone of northern Iraqi oil output, with peak production reaching up to 1 million barrels per day. However, output has declined significantly, currently ranging between 285,000 and 330,000 barrels per day, primarily for domestic use.
Despite production challenges, Iraq successfully restarted crude oil exports of 250,000 barrels per day via the Kirkuk-Ceyhan pipeline to Turkey in March 2026, following a nearly three-year suspension. Iraq is also exploring diversified export routes, including U.S.-backed initiatives to reconstruct the Kirkuk-Baniyas pipeline through Syria to the Mediterranean coast, seeking to bypass maritime chokepoints like the Strait of Hormuz.