British energy major BP has finalised technical terms with the Iraqi Government for the redevelopment of the Kirkuk oil and gas fields.

This agreement follows the initial deal signed in August 2024 to develop the oilfield in northern Iraq, including the construction of  power and solar plants.

Iraq, the second-largest oil producer in OPEC after Saudi Arabia, has a production capacity of nearly five million barrels per day. It has a long history of association with bp.

The Kirkuk oilfield was discovered in the 1920s by a consortium that included bp. It underwent technical studies conducted by bp from 2013 to 2019 to evaluate its redevelopment potential.

The field is estimated to contain approximately 9bbbl of recoverable oil.

BP executive vice-president William Lin said: "Today's signing is an important step toward a fully termed contract."

BP anticipates that the final negotiations will be concluded by early 2025.

Sources familiar with the matter suggest that the new contracts will likely offer more favourable profit-sharing terms compared with previous agreements that provided minimal margins to foreign companies.

When asked for further details on the technical terms and whether the fields would be redeveloped under a technical service contract or a profit or production-sharing model, a bp spokesperson stated that no additional information was available.

The company also holds a 50% stake in a joint venture (JV) managing the vast Rumaila oilfield in southern Iraq, where it has been active for a century.

Recently, bp and the international investment arm of Abu Dhabi National Oil Company (ADNOC), XRG, finalised the formation of a new natural gas JV named Arcius Energy, set to operate in Egypt.

The JV marks a strategic step for ADNOC in expanding its global presence.

BP holds a majority stake of 51% in Arcius Energy, while XRG owns the remaining 49%.