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BP pushes ahead with $25bn project in Iraq

1 October 2025

 

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London-headquartered oil and gas company BP is progressing its project to develop oil fields in Iraq’s Kirkuk region, with major tenders now expected in 2027 or 2028, according to industry sources.

Exploration work is ongoing in the region, along with an assessment of the existing discoveries and infrastructure at the sites.

One source said: “The project is still in an early stage. It’s normal for projects that are so large to take time to build momentum.

“Right now, BP is trying to work out exactly what it is dealing with and just how to approach such an ambitious project.”

Another source said: “No major tenders should be expected in 2026, but, with the current project schedule, it’s likely that invitations to bid for large contracts should be issued in 2027 or 2028.”

Export route

The recent reopening of the Iraq-Turkiye Pipeline (ITP) is expected to have a positive impact on the project’s progress, according to industry sources.

One source said: “It is key for this project that there are reliable routes to export large volumes of crude.

“While the ITP was closed, BP had very limited options to export oil produced by these fields.”

First phase

In March, BP received final government ratification for its contract to invest in the redevelopment of several giant oil fields in Kirkuk, which is expected to be worth about $25bn.

The agreement covers the initial phase, which includes oil and gas production of more than 3 billion barrels of oil equivalent (boe).

It includes the Baba and Avanah domes of the Kirkuk oil field and three adjacent fields in the Federal Republic of Iraq – Bai Hassan, Jambur and Khabbaz.

All of these were previously operated by Iraq’s North Oil Company (NOC).

Since March, BP engineers have begun initial assessments at the four oil fields that are the focus of the project’s first phase.

The assessments at the Kirkuk fields will be followed by the finalisation of a field development plan aimed at boosting production and creating efficiencies.

Production from the Kirkuk oil fields is currently between 285,000 barrels a day (b/d) and 330,000 b/d.

Most of the production is consumed domestically, and some is exported to Jordan.

The deal with BP is expected to raise Kirkuk production by between 50,000 b/d and 100,000 b/d in the coming years. 

The wider $25bn project is also expected to include the construction of solar power stations.

Kirkuk’s oil output has seen sharp declines over the years. Between 2005 and 2010, production ranged from 600,000 to 725,000 b/d, with around 500,000 b/d exported to Turkiye’s Ceyhan port.

By 2014, production had fallen to 400,000-500,000 b/d, dropping further to 250,000-325,000 b/d in the following years due to reduced well productivity.

In December of last year, BP agreed to the technical terms for developing the Kirkuk oil fields.

This was followed by an agreement on all contractual terms, which was announced on 25 February 2025.

The contract was then signed on 10 March 2025.

BP, which was part of the consortium that discovered oil in Kirkuk in the 1920s, previously signed a letter of intent in 2013 to study the development of the Kirkuk fields. However, the plan was suspended in 2014 after the Islamic State took control of parts of northern and western Iraq.

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Wil Crisp

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