BP in oil and gas talks across the Middle East
26 November 2024
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UK-headquartered BP is engaged in oil and gas talks with countries across the Middle East as it looks to boost upstream production, according to the company’s chief executive, Murray Auchincloss.
Speaking at a conference in London, he said: “We’re back accessing the Middle East.”
He added: “We’re in advanced conversations in Iraq and we continue to talk to Abu Dhabi, Oman, Kuwait, Iraq – for further opportunities … let’s see how we do in those places.”
Commenting on the country’s potential return to the Kirkuk region in northern Iraq, he said: “I hope we come to an agreement with the nation fairly soon. I would like to see that by the end of February, but let’s see how that goes.
“It’s five domes, 20 billion barrels yet to produce [and] very competitive terms internationally now – and a government that is going to work with you and a much-stabilised security situation as well.”
In August, BP signed a memorandum of understanding (MoU) with the government of Iraq to develop oil fields in the Kirkuk region.
At the time, BP said that it had signed a non-binding agreement to “negotiate a material integrated redevelopment programme for the Kirkuk region”.
It said the scope of work would include oil and gas investment, power generation and solar, and “wider exploration activities”.
Plans in Iraq
The MoU signed for Kirkuk includes the Baba and Avanah domes and three adjacent fields – Bai Hassan, Jambur and Khabbaz – in Federal Iraq, which are operated by Iraq’s North Oil Company (NOC).
In its statement, BP said: “Rehabilitation of existing facilities, where required, and the construction of new facilities – including gas expansion projects – together with a drilling programme at the Kirkuk fields, has the potential to stabilise production and reverse decline, returning production from this nationally important oil field to a growth path.
“The integrated redevelopment programme has the potential to bring opportunity and investment into the Kirkuk region – unlocking future downstream growth while also bringing tangible benefits to the local population, with job creation and local supply requirements.”
In 2020, BP pulled out of Iraq’s giant Kirkuk oil field after its $100m exploration contract expired with no agreement on the field’s expansion, dealing a blow to Iraq’s hopes of increasing its oil output.
The move came as Western energy companies reassessed their operations in Iraq amid political turmoil following months of anti-government protests and a flare-up in tensions between the US and Iran in the country.
The UK-headquartered oil company’s 2013 service contract expired at the end of 2019.
Kirkuk was discovered in 1927 and marks the birthplace of Iraq’s oil industry. BP and Iraq’s Oil Ministry signed the letter of intent to study the development of the field in 2013, with a planned spending of $100m.
BP’s work included a three-dimensional seismic study of the field’s reservoir to expand on the existing 2D data.
BP already has a 50% stake in Iraq’s Rumaila oil field near the southern border with Kuwait, where it has operated for over a century.
Kuwait investments
The London-based company is also considering investing in Kuwaiti fields. In March 2016, BP signed a framework deal with state-owned Kuwait Petroleum Corporation (KPC), paving the way for joint investment and increased cooperation on oil and gas projects.
A statement released by BP at the time said both companies had agreed “to explore possible joint opportunities for investment and cooperation in future oil, gas, trading and petrochemicals ventures”.
The agreement involves collaborating on enhancing oil and gas recovery from Kuwait’s existing resource base.
It includes cooperation on studying opportunities for joint investment in future hydrocarbons exploration both inside Kuwait and globally, as well as possible future trading deals, including trading liquefied natural gas (LNG).
Cooperation on midstream and petrochemicals projects will also be covered by the deal, including potentially deploying BP’s proprietary paraxylene technology as part of KPC’s chemicals schemes.
BP was one of the founders of the original Kuwait Oil Company (KOC), which first discovered oil at Kuwait’s Burgan field in 1938.
In 1992, BP was the first oil company to be invited by the Kuwaiti government to assist in the redevelopment of Kuwait’s oil industry.
BP currently participates in the Greater Burgan field, which accounts for about 50% of Kuwait’s total output.
It participates through an enhanced technical service agreement (ETSA) with KOC, under which it provides support to sustain production, develop capabilities and deploy new technologies.
In 2018, BP signed a five-year technical services agreement with Kuwait Integrated Petroleum Industries Company (Kipic) to develop and implement an operational readiness programme for the Al-Zour refining complex and LNG terminal – some of the largest capital projects in Kuwait.
The oil refining facility reached mechanical completion in 2021. However, several factors prolonged the commissioning phase, including the Covid-19 pandemic and related measures designed to reduce the spread of the virus.
In May this year, Kuwait inaugurated the Al-Zour refinery with a ceremony to mark its completion.
The $2.9bn Al-Zour LNG facility came online in July 2021.
Expansion in Oman
In Oman, production from phase one of Block 61, Khazzan, started in 2017. In October 2020, production from phase two, Ghazeer, started ahead of schedule.
Combined, Khazzan and Ghazeer produce 1.5 billion cubic feet of gas a day and more than 60,000 barrels a day of associated condensate.
BP has been an investor in Abu Dhabi since 1939. It has partnerships in oil and LNG in Abu Dhabi and has a lubricants, aviation fuel and trading businesses that is managed from Dubai.
In Abu Dhabi, BP’s interests include joint-venture partnerships with Abu Dhabi National Oil Company (Adnoc) and shareholdings in Adnoc Onshore (BP’s share is 10%); Adnoc LNG (BP’s share is 10%); and the National Gas Shipping Company (BP’s share is 10%).
Before becoming the CEO of BP, Auchincloss was interim CEO from September 2023 to January 2024 after the sudden resignation of Bernard Looney due to failing to reveal relationships with colleagues.
In October, it was reported that BP had abandoned a target to cut oil and gas output by 2030 as CEO Murray Auchincloss scaled back the firm’s energy transition strategy to regain investor confidence.
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Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
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