BP has pulled out of Iraq’s giant Kirkuk oilfield after its $100 million exploration contract expired with no agreement on the field’s expansion, three sources told Reuters.
The move comes as Western energy companies reassess their operations in Iraq amid political turmoil following months of anti-government protests and an increase in tensions between the U.S. and Iran in the country, Kallanish Energy understands.
BP informed Iraqi authorities last month it’s pulling its staff out of the oilfield in the northern portion of the country as its 2013 service contract expired at the end of 2019, the sources told Reuters.
A senior source at Iraq’s North Oil Co. (NOC), which overseas the Kirkuk operations, confirmed to Reuters BP’s withdrawal.
“The results of its field study for Kirkuk oilfield development have been handed over to the North Oil Co. and, unfortunately, it was below expectations … at least for us,” the official said. “It’s very obvious study results were not encouraging for BP to extend its operations,” he added.
The Iraqi government did not reply to a request for comment.
BP confirmed it had completed the field work and studies and said it had handed its recommendations for the development of the field to the NOC. The London-based supermajor did not comment on staff movements.
Another senior NOC engineer told Reuters BP staff left their laptops with the NOC after completing the survey and technical study of the field.
Iraq was hoping BP would help it triple output from the field, to one million barrels per day (Mmbpd) – more than 20% of Iraq’s current production and 1% of global output.
But BP’s contract was put on hold in 2014 when the Iraqi army collapsed in the face of Islamic State’s advance in northern and western Iraq, allowing the Kurdish regional government (KRG) to take control of the Kirkuk region.
Baghdad regained full control of the deposit from the regional government in 2017, after a failed Kurdish independence referendum, at which point BP resumed its field studies, Reuters reported.
Kirkuk is estimated to contain roughly nine billion barrels of recoverable oil, according to BP.
