ConocoPhillips has agreed to acquire BP’s 42% stake in BP Energy Company of Kirkuk Limited, the company involved in the development of several oil fields in northern Iraq. The transaction brings the US company into one of the country’s most significant hydrocarbon recovery programs.
Furthermore, the agreement will allow BP to retain majority control of the subsidiary after the transaction closes. The companies expect to complete the process before the end of 2026, subject to regulatory approvals and customary closing conditions.
ConocoPhillips enters Kirkuk oil fields
The stake will give ConocoPhillips access to the development and production contract that covers the Kirkuk field and several nearby assets. The area includes the Baba and Avanah domes, as well as the Bai Hassan, Jambur, and Khabbaz fields.
In total, the initial phase comprises more than 3 billion barrels of oil equivalent in recoverable gross resources. The contract also includes additional exploration opportunities within an area with existing production infrastructure.
Furthermore, the operation aims to improve the performance of mature fields through facility rehabilitation, well optimization, and new investments. The program will leverage BP’s operational experience and ConocoPhillips’ technical capabilities in large-scale upstream projects.
Oil production in Kirkuk gains new momentum
Kirkuk occupies a central position in Iraq’s strategy to sustain its crude oil production for decades to come. Although the field was discovered nearly a century ago, it still holds significant reserves and has a large industrial base.
Currently, Northern Oil Company operates the assets included in the contract, BP indicated that the entry of ConocoPhillips will not modify the conditions agreed with Iraq or the functions planned for the national oil and gas companies.
Likewise, the agreement should not require significant capital contributions from the joint venture during its initial phase. This structure reduces immediate financial pressure and allows resources to be concentrated in areas with the greatest potential for productive recovery.
Iraq seeks more US energy investment
The deal is part of a broader strategy by Baghdad to attract US investment to the oil, gas, and electricity sectors. The signing is linked to Iraqi Prime Minister Ali al-Zaidi’s official visit to Washington.
In parallel, the Iraqi government has made progress on agreements with HKN Energy to develop the Himreen field and with GE Vernova to expand electricity generation and transmission. These initiatives demonstrate the country’s interest in diversifying its international partners and strengthening its energy infrastructure.
Furthermore, ConocoPhillips’ entry provides Iraq with a new link to one of the largest independent hydrocarbon producers in the United States. The company operates in various international markets and maintains a portfolio focused on exploration, development, and production.
The operation supports BP’s reorganization
For BP, the partial sale allows it to share risks while maintaining a majority stake in a large-scale asset, the company has strengthened its capital discipline through partnerships, selective sales, and a review of its global portfolio.
BP CEO Meg O’Neill believes Kirkuk’s resource base can support Iraq’s energy goals and generate long-term value. The addition of ConocoPhillips also brings financial capacity and technical expertise to the program.
From ConocoPhillips’ perspective, the project combines existing production with exploration potential, Ryan Lance, the company’s president and CEO, highlighted the opportunity to implement a capital-efficient development plan on an already established production base.
An acquisition exposed to geopolitical risk
The price of the deal was not disclosed, however, RBC Capital Markets estimated that the stake could be worth between $300 million and $500 million.
Although the project increases ConocoPhillips’ exposure to political and operational risks in the Middle East, it also expands its access to long-life reserves. The balance between production potential, initial investment, and contractual stability will be crucial for the asset’s future performance.
The transaction is still subject to regulatory review, after closing, BP will remain the majority shareholder of BP ECKL, while ConocoPhillips will assume a significant role in the next phase of development of the Kirkuk oil fields.
Source: Conocophillips
Photo: Shutterstock
