BP Signs Mammoth 25 Billion Deal with Iraq to Revitalise Northern Oilfields

British energy giant BP has entered into a significant agreement with the Iraqi government to redevelop four substantial oil and gasfields in the northern region of Kirkuk. The landmark deal, potentially worth $25 billion over its lifespan, emerges as BP prepares to distance itself from renewable energy targets established under former leadership.

The strategic partnership arrives at a crucial moment for Iraq, where oil production has historically suffered from the impacts of war, widespread corruption, and internal conflicts. The contract area holds estimated resources of up to 20 billion barrels equivalent of oil and gas, with initial phase operations targeting production exceeding three billion barrels equivalent.

Iraq’s state news agency reported that the agreement materialised following successful negotiations on technical specifications and contractual terms, including the project’s economic framework. BP’s primary focus will centre on rehabilitating existing facilities across four oilfields and developing natural gas infrastructure to support Iraq’s domestic energy requirements.

The Kirkuk project represents one of three major initiatives recently approved by BP, positioning itself as a strategic asset capable of generating faster returns compared to other long-term ventures such as the Kaskida development in the Gulf of Mexico. This move signals a significant shift from the company’s previous direction under former chief executive Bernard Looney, who had championed a gradual transition towards renewable energy.

Under new leadership, Murray Auchincloss, BP’s current chief executive, is orchestrating what industry insiders describe as a “fundamental reset” of the company’s strategy. The revised approach includes abandoning various targets, notably the commitment to reduce oil and gas output, whilst scaling back investments in low-carbon initiatives.

The deal underscores BP’s renewed focus on traditional energy sources, marking a decisive pivot from the green energy strategy that failed to deliver anticipated returns and shareholder value under previous management. This strategic realignment positions BP to strengthen its core business while maintaining its dominant position in global energy markets.