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After in January media reported that the Iraqi government had invited BP to carry out a feasibility study on increasing production from the oil fields in the area around the northern city of Kirkuk, AFP quoted the Iraqi Energy Minister Jabbar al-Luiebi as saying he hoped to discuss the issue with Bob Dudley, BP’s chief executive, who was due to visit Kirkuk this week.
The Iraqi government first approached the supermajor in 2014, with a request for it to study the development of two Kirkuk fields, Baba Gurgur and Havana. Yet the advance of Islamic State and the subsequent takeover of these parts of Iraq by the Kurdish peshmerga nipped that deal in the bud.
Last October, Baghdad again approached BP after its army retook control of Kirkuk from Kurdistan after an ill-fated independence referendum. In January this year, the government signed a preliminary deal with the supermajor for the development of the Kirkuk fields.
The current production rate of five fields around Kirkuk is about 470,000 bpd, but exports have been hampered because of damages along the Kirkuk-Ceyhan pipeline.
BP was present in northern Iraq until 2015, providing technical assistance in the development of the huge Kirkuk field, but after that, the Kurdish minority took over the field and adjacent deposits.
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Though control of the city of Kirkuk has been disputed over the last few years, as it doesn’t lie within the boundaries of the Kurdistan autonomous region, control over the fields was effectively in Kurdish hands to the chagrin of Baghdad. After the referendum from last September, the Iraqi government saw a chance to regain control of its northern oil wealth, so it took it.
In mid-October, the energy ministry urged BP to return to the northern Iraqi fields as quickly as possible to help it boost production from the Kirkuk fields to over 1 million barrels daily, despite its quota under the OPEC production cut deal.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.