The federal government of Iraq has reportedly asked BP to quickly develop oil fields in Kirkuk, just days after the city was re-taken by the Iraqi armed forces.
The re-taking of the city and nearby oil fields followed a referendum in which the Kurdish region voted in favour of independence. Kirkuk had previously been under the control of the Kurdish Regional Government (KRG), despite not being an official part of the autonomous region.
The Iraqi government said it was keen to “rehabilitate” the oil fields and increase production as soon as possible.
BP confirmed to SM that it had recently discussed the issue of Kirkuk with Jabar al-Luaibi, Iraq’s oil minister, but declined to comment further.
Kirkuk is home to the oldest and largest oil fields in the Middle East, and is estimated to contain around 9bn barrels of accessible oil.
Al-Luaibi met senior BP executives to discuss increasing production in Kirkuk by to more than 700,000 barrels per day (bpd), and discussed the possibility of reactivating a 2013 deal to bring another oil field in northern Kirkuk back online, Reuters reported.
Kirkuk currently produces around 300,000 bpd, which accounted for about half of the Kurdish region's total production.
BP told SM: “We met the Iraq oil minister in Baghdad yesterday on a number of issues; one of them was Kirkuk, our potential support and discussion of the current situation.”
Reuters quoted a BP spokesman who said it would send a joint team with the oil ministry to survey the oil fields.
Iraq’s oil ministry also announced plans to rebuild an oil pipeline that was destroyed by militants in 2014. Currently the Iraq government is reliant on a pipeline that runs through Kurdish territory.
KRG forces, the Peshmerga, took control of Kirkuk in 2014 after ISIS seized control of nearby Mosul, causing Iraqi forces to flee. KRG argue the Kirkuk region should be part of Kurdish territory.
In a non-binding referendum last month on whether the Kurdish autonomous region in Iraq should be independet, approximately 93% of votes cast were in favour and registered voter turnout was nearly 73%.
The referendum took place in the face of international opposition, including from bordering Iran, Afghanistan and Turkey. The US and UK also opposed the referendum.
Disagreements with the federal government over the division of oil revenues are also part of the dispute and have been feeding calls for independence.
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