The contract signing. (Image source: bp)

bp has received final government ratification for its contract to invest in the redevelopment of several giant oil fields in Kirkuk, in the north of Iraq, following the agreement of terms in February

The contract between North Oil Company (NOC), North Gas Company (NGC) and bp includes the rehabilitation and redevelopment of the fields, spanning oil, gas, power and water with potential for investment in exploration.

“bp has a decades-long history in Iraq, and we look forward to building on this as we embark on our next chapter of production in the country,” said bp chief executive Murray Auchincloss. “From signing a memorandum of understanding last year to now fully completing our agreement, we’re looking forward to getting to work. Together with our partners, we aim to deliver world-class operations, combining deep local knowledge with our expertise in managing giant fields and safely executing major projects.

bp sees the project as an enormous opportunity aligning with its plans to ramp up oil and gas production and scale back renewables investments, as part of a revised growth strategy focusing more on hydrocarbons.

bp will now work under the guidance of the Government to set up a new operator – an unincorporated organisation comprising predominantly personnel from NOC and NGC, but also with secondees from bp – to prepare for the initial stages of development.

The agreement is for an initial phase that includes oil and gas production of more than 3bn barrels of oil equivalent. It includes the Baba and Avanah domes of the Kirkuk oil field and three adjacent fields in Federal Iraq – Bai Hassan, Jambur and Khabbaz – all of which are currently operated by the NOC. The wider resource opportunity across the contract and surrounding area is believed to include up to 20bn barrels of oil equivalent.

bp has a long history at Kirkuk, supporting NOC and the Iraq government on technical studies between 2013 and 2019 to explore the potential for redevelopment. It was also a member of the consortium of firms that discovered oil at Kirkuk in the 1920s.

bp has a long history at Kirkuk (IMAGE SOURCE: Adobe Stock)

Iraq has agreed contract terms with bp for the redevelopment of oil fields at Kirkuk, with work expected to begin in 2025

The deal will see bp invest in various Kirkuk fields, providing oil, gas, power and water rehabilitation work, with the potential for investment in exploration too.

The agreement — subject to final government ratification — is for an initial phase and includes production of more than three billion barrels of oil equivalent (boe). It includes the Baba and Avanah domes of the Kirkuk oil field and three adjacent fields – Bai Hassan, Jambur and Khabbaz – which are currently operated by the North Oil Company (NOC).

In a statement, bp said that the “wider resource opportunity” across the contract and surrounding area is up to 20 billion boe. The value of the work is expected to be worth in the region of US$25bn over the contract period, according to news agency Reuters.

“This agreement builds on our longstanding and strategic relationship with the Iraq government and delivers access to a material new resource opportunity, within one of the world’s most prolific hydrocarbon provinces,” said bp executive vice president William Lin.

The news comes after bp announced that it would ramp up oil and gas production, and scale back renewables investments, as part of a revised growth strategy focusing more on hydrocarbons.

Under the terms of the agreement, bp’s remuneration will be linked to incremental production volumes, price and costs.It will also be able to book a share of production and reserves proportionate to the fees it earns for helping to increase production.

New operator

The intention is to to set up a new operator, initially an unincorporated organisation comprising predominantly of personnel from NOC and North Gas Company (NGC), with secondees from bp. This will take over operations at Kirkuk from NOC, although bp said it later expects to form a standalone incorporated joint venture to hold its interests in the operator. Its first priority will be to stabilise and grow production, with work set to include a drilling programme, the rehabilitation of existing wells and facilities, and the construction of new infrastructure, including gas expansion projects.

bp said the investment will bring opportunity and growth to the Kirkuk region, as well as improving supply chain capability alongside job creation.

“It will enable us to bring our experience of managing giant fields to realise the potential of this important asset for Iraq, working alongside and in close partnership with NOC and NGC,” added Lin. “This opportunity is fully in line with our priority of pursuing new growth opportunities for bp as we strengthen and high-grade our portfolio across the world.”

The deal follows a memorandum of understanding signed by bp and Iraq in July 2024, of which technical terms were agreed in December and the majority of commercial terms in January.

bp has a long history at Kirkuk, supporting NOC and the Iraq government on technical studies between 2013 and 2019  to explore the potential for redevelopment. It was also a member of the consortium of firms that discovered oil at Kirkuk in the 1920s.

The new wells are expected to produce around 220bn cubic feet of gas and 7 million barrels of condensate. (Image source: bp)

bp has announced the start of production ahead of schedule from the second development phase of the Raven field, part of the West Nile Delta (WND) project offshore Egypt

The project involves the subsea tieback of additional Raven infill wells to its existing onshore infrastructure. The new wells are expected to produce around 220bn cubic feet of gas and 7mn barrels of condensate. bp, the operator, holds an 82.75% stake in the project, with Harbour Energy owning the remaining 17.25%.

The WND Gas Development comprises a series of gas condensate fields located offshore Egypt, within the North Alexandria and West Mediterranean Deepwater concessions. The Raven field, the final phase of the WND project, has been in production since early 2021. Its initial phase included the development of eight subsea wells, located up to 65 km offshore, at water depths ranging from 550 to 700 m.

Nader Zaki, bp regional president for the Middle East and North Africa, commented, "Since January 2024, we have not stopped drilling for one day. The focus of the Raven Infills project has been to fight natural decline and increase production while maximising our existing infrastructure to meet Egypt’s domestic market demand at pace. This further demonstrates bp’s commitment to investing in Egypt, enabled by the unparalleled support and partnership with the Ministry of Petroleum, EGPC, and EGAS."

Earlier this month, bp announced it had successfully completed the drilling activity at the “El King-2” exploration well in the North King Mariout Offshore Concession as part of its WND drilling campaign. The well encountered two prospective Messinian reservoirs at a measured depth of approximately 2,400 m. Zaki commented at the time that bp is well-positioned to fast-track the development of the discovery with its existing infrastructure, execution capabilities and strategic partnerships with the Ministry of Petroleum.

bp is a leading energy investor in Egypt, where it has been operating for almost 60 years, with an investment of more than US$35bn. With its partners, it currently produces around 70% of Egypt’s gas through its gas development projects in the West and East Nile Delta.

bp says it is committed to maximising production from existing resources, exploring new opportunities to add new resources, and leveraging its existing infrastructure to support gas supply that meets growing domestic demand while strengthening Egypt’s position as a key energy partner in the region.

In December, bp and XRG (ADNOC’s international energy investment company) announced they had formed a new joint venture Arcius Energy (51% bp, 49% XRG). The JV will initially focus on gas development in Egypt, and includes interests assigned by bp across two development concessions, as well as exploration agreements.

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High impact exploration drilling. (Image source: Westwood Global Energy Group))

QatarEnergy is expected to be the most active explorer in 2025, participating in 13 high impact wells, according to Westwood Energy’s latest insight on Key Wells to Watch in 2025

This reflects the expansion of QatarEnergy’s upstream portfolio in recent years. In 2024, QatarEnergy expanded its presence in Egypt with the signing of an agreement with ExxonMobil to acquire a 40% participating interest in two exploration blocks offshore Egypt, and signed an agreement with TotalEnergies to acquire additional interests in the Orange Basin, offshore Namibia. It has also made recent acquisitions in Mauritania and Lebanon.

High impact exploration drilling remains stable

Westwood forecasts high impact exploration drilling globally will remain stable in 2025, with 65-75 wells expected to complete, compared to the 69 completed in 2024. 21 frontier wells are expected in 2025, up from 19 wells in 2024, 11 of which are targeting frontier basins, whilst new plays will be tested in the proven Sabah, Rio Muni, Western Black Sea, Suriname-Guyana and Cauvery basins. Emerging play wells are expected to account for around 30% of high impact wells in 2025 while high value prospects in mature and maturing plays are forecast to make up 40%. The Arabian, Campos, Gulf of Mexico, Kutei, Norwegian Sea, Santa Cruz and Santos basins will all have multiple high impact maturing/mature play prospects drilled.

Busy year for Africa

Africa should see another busy year for high impact drilling with 14 wells expected to be drilled. Eyes will be on the Orange Basin, where 7-10 wells are expected to be drilled in 2025, which will be key to determining the ultimate potential of the basin. Elsewhere in Africa, Azule Energy is expected to drill the Kianda-1 well in the outboard area of the Congo Basin, Angola, and there are potential high impact wells being drilled offshore in the Namibe, Rio Muni and Tano basins, as well as potential frontier onshore tests in the Cabora Bassa and Kavango basins.

High impact drilling in North America, on the other hand, continues to decline, with only five high impact wells currently forecast to be drilled in 2025, while South America could see 17 high impact wells, making it the most prolific region globally. They include key wells in Brazil at Andorinha in the Campos Basin, and the Bumerangue well in the Santos, which could extend the pre-salt play further south. Key wells are also expected to be drilled in Columbia and Suriname.

In the Mediterranean, Black Sea and Middle East, 14 high impact wells are expected to be drilled. Key wells to watch are Egypt’s Khendjer-1 well in the North El-Dabaa area of the Mediterranean, and the Nefertari gas discovery in the Herodotus Basin offshore Egypt. Two wells are expected offshore Cyprus, and Matsola offshore Libya is a significant well, exploring the offshore extension of the Sirte Basin. Elsewhere, high impact wells will be drilled in Kuwait, Kazakhstan and the UAE.

14 high impact wells are expected in Asia Pacific, and eight in Europe.