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By Aref Mohammed and Ahmed Rasheed
BAGHDAD (Reuters) – Oil main BP is predicted to spend as much as $25 billion over the lifetime of a mission to redevelop 4 Kirkuk oil and fuel fields, a senior Iraqi oil official advised Reuters, as Baghdad seeks to win again overseas funding.
Offered the deal is signed, which the official stated might be over the approaching weeks, it could mark a breakthrough for Iraq, the place output has been constrained by years of battle, corruption and sectarian tensions.
Even so it’s the second-largest oil producer within the Group of the Petroleum Exporting Nations (OPEC), behind solely Saudi Arabia.
The senior official with direct information of the difficulty stated BP would make investments between $20 billion and $25 billion over a profit-sharing settlement that will final greater than 25 years.
BP didn’t instantly reply to a request for touch upon the dimensions of the deal, which has not beforehand been made public.
The Iraqi official requested anonymity as a result of he was not authorised to talk publicly on the difficulty.
The potential BP settlement can be the second main deal between Iraq and a global oil firm in as a few years after an settlement in Basra with TotalEnergies, valued at round $27 billion.
IRAQ’S DOMESTIC NEEDS
The BP deal is targeted on rehabilitating amenities in 4 oilfields and creating pure fuel to help Iraq’s home power wants.
The official stated technical and financial negotiations had been progressing effectively and remaining contracts might be signed within the first half of February and probably by the top of this week.
Below the phrases of the contract, BP would increase crude manufacturing capability from the 4 oilfields in Kirkuk by 150,000 barrels per day (bpd) to boost whole capability to no less than 450,000 bpd in 2-3 years, the official stated.
That compares with present capability of 300,000 bpd, in line with three officers from the state-run North Oil Firm (NOC).
Below the profit-sharing mannequin being mentioned, the senior oil official stated BP would have the ability to get better prices and begin making income as soon as it has elevated output past present ranges.
BP has deep information of the Kirkuk fields.
It was a member of the consortium of firms that found oil in Kirkuk within the Twenties and has estimated the realm holds about 9 billion barrels of recoverable oil.
The oil main and the Iraqi oil ministry signed in 2013 a letter of intent to check creating Kirkuk however that deal was placed on maintain in 2014 when the Iraqi navy collapsed within the face of Islamic State’s advance in northern and western Iraq, permitting the Kurdish Regional Authorities (KRG) to take management of the Kirkuk area.
Baghdad regained full control of the deposit from the KRG in 2017 after a failed Kurdish independence referendum.
BP then resumed its studies on the field, but in late 2019 it pulled out of the oilfield after its 2013 service contract expired with no agreement on the field’s expansion.
BP holds a 50% stake in a joint venture operating the giant Rumaila oilfield in the south of the country, where it has been operating for a century.
(Reporting by Aref Mohammed and Ahmed Rasheed; editing by Maha El Dahan and Barbara Lewis)
