BP set to revive Iraqi oil field at Kurdish border

LONDON - Reuters

Major UK oil firm BP is set to sign a deal regarding Kirkuk oilfield, which could pit the central Iraqi government against Kurdish authority.

BP expects to sign an initial deal in early September to revive Iraq’s northern Kirkuk oilfield, an industry source said, a move that could affect regional politics because the field straddles the border with the autonomous Kurdish region.

A deal at Kirkuk would allow the British major - already at work at Iraq’s biggest producer, Rumaila, in southern Iraq - to negotiate access to significant reserves in the north. Baghdad would get a trusted, experienced partner to help arrest a huge decline in output from Kirkuk.

“It’s an initial 18-month deal to offer support, which will provide an opportunity for BP to negotiate a longer-term development contract,” said the source, who is familiar with the negotiations.

BP’s involvement at Kirkuk has been under negotiation for more than a year. When Baghdad first revealed the preliminary arrangement in January, the KRG rejected the pact as illegal, because it had not been consulted.