BP and PetroChina cut budgets for Iraq oil projects

5 November 2026

 

London-headquartered BP and PetroChina have agreed with Turkish contractor Tekfen to reduce the monthly allocated budgets for two upstream oil projects at the Rumaila field, according to industry sources.

Rumaila Operating Organisation (ROO) operates the Rumaila field.

ROO is a joint venture formed by state-owned Basra Oil Company; Iraq’s State Oil Marketing Organisation (Somo); and Basra Energy Company, a joint venture owned by UK-based oil company BP and PetroChina.

PetroChina is the listed arm of state-owned China National Petroleum Corporation.

As part of the agreement between ROO and Tekfen, progress on the projects will continue at a slower pace.

The two projects are both also suffering from delays due to problems importing equipment through the Strait of Hormuz, sources said.

One source said: “These projects are really barely alive. They are progressing very slowly after the monthly budgets were cut by the client. The project is still continuing, but at a slow pace. The budgets are very limited.”

Sources said that although the monthly budget payments were reduced, they were still being made on time.

Most of the problems that the projects at the oil field are facing are connected to the regional war, which started on 28 February when the US and Israel attacked Iran.

One source said: “The budget issues and financial problems are significant. There are also security concerns connected to reported US plans for a potential strategic nuclear strike on Iran and how that might impact operations at the Rumaila field, which is only around 60 kilometres from the Iranian border.”

The two projects have a combined value of less than $100m, and the project scopes include developing new facilities as well as upgrading and repairing existing upstream infrastructure.

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Wil Crisp
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