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BP Gets Final Approval for Iraq's Kirkuk Oil Redevelopment

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BP plc (BP - Free Report) , the UK-based energy major, has secured final approval from the Iraqi government to proceed with the redevelopment of the Kirkuk oil fields, aiming to produce more than 3 billion barrels of oil equivalent. This agreement marks a significant advancement for Iraq's energy sector, which has faced challenges due to years of conflict and infrastructural issues. The project also aligns with BP's strategic focus on enhancing its oil and gas portfolio.

The contract involves collaboration between BP, Iraq's North Oil Company (“NOC”), and North Gas Company (“NGC”). The initial phase targets the Baba and Avanah domes of the Kirkuk oil field, along with three adjacent fields — Bai Hassan, Jambur, and Khabbaz. These areas are currently operated by NOC. The broader resource potential in the contract and surrounding regions is estimated to be up to 20 billion barrels of oil equivalent.

BP's compensation will be linked to incremental production volumes, market prices and operational costs. The company will have the opportunity to book a share of the output and reserves proportional to the fees earned from increasing production. A new operating entity will be established, comprising personnel from NOC, NGC and BP secondees, to oversee the redevelopment efforts.

BP's involvement in Kirkuk dates back to the 1920s, when the company first began participating in the discovery of these oil fields. The current redevelopment initiative reflects BP's commitment to leveraging its extensive experience in managing large-scale projects to support Iraq's energy infrastructure. The project is expected to stimulate economic growth in the Kirkuk region by creating job opportunities and enhancing local supply chains.

With this approval, BP is poised to commence operations that will contribute to revitalizing Iraq's oil production capabilities and support the nation's broader economic development goals.

BP’s Zacks Rank & Key Picks

BP currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. (AROC - Free Report) , NextDecade Corporation (NEXT - Free Report) and W&T Offshore, Inc. (WTI - Free Report) . While Archrock presently sports a Zacks Rank #1 (Strong Buy), NextDecade and W&T Offshore carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

NextDecade is an emerging player in the LNG space with its Rio Grande LNG project in Texas. As demand for LNG continues to grow, the company’s strategic investments in infrastructure and planned liquefaction capacity provide strong upside potential. With the global LNG market expanding, NEXT is well-positioned to capitalize on the growing export demand from the United States.

W&T Offshore leverages its strong Gulf of Mexico assets, which offer low decline rates and significant untapped reserves. The company recently expanded its portfolio with six shallow-water field acquisitions, adding substantial proven and probable reserves. Focused on high-return organic projects, WTI has maintained positive cash flows for 27 consecutive quarters.


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