BP has received final government approval for the redevelopment of Iraq's giant Kirkuk oil fields, with an initial plan to produce 3 billion barrels of oil equivalent, the company said on Wednesday.
The project is a breakthrough for Iraq, where output has been constrained by years of war, corruption and sectarian tensions, and a cornerstone of BP's drive to refocus on its oil and gas business and away from renewables.
Tuesday's signing of a final agreement on the project between BP CEO Murray Auchincloss and Iraq's Prime Minister Mohammed Shia al-Sudani follows an initial deal signed last month and a memorandum of understanding last year.
BP said its remuneration will be linked to incremental production volumes, price and costs, and that the company will be able to book a share of output and reserves "proportionate to the fees it earns for helping to increase production".
The first phase of the redevelopment of the Kirkuk fields, which BP first helped to discover in the 1920s, will cover their Baba and Avanah domes and three adjacent fields Bai Hassan, Jambur and Khabbaz, BP said.
A new operator will be set up, including staff from Iraq's North Oil Company (NOC) and North Gas Company (NGC) as well as people seconded from BP.