BP’s US$25bn Five-Field Megadeal In Iraq Is Finally Activated

Core Insights - BP and Iraq's Oil Ministry have set a preliminary production target of 328,000 barrels per day (bpd), expected to rise to at least 450,000 bpd within two to three years, with a long-term project duration of 25 years [1][2] - The lifting cost for oil production in Iraq is projected to be between $2-4 per barrel, among the lowest globally, alongside Iran and Saudi Arabia [1] - BP's operations will also focus on capturing associated gas, targeting an initial output of 400 million standard cubic feet per day (mmcf/d) [1] Production and Reserves - The five oil fields involved are estimated to hold up to 9 billion barrels of oil reserves, with conservative estimates suggesting an additional 11-12 billion barrels in the surrounding area [1] - The project aims to reassess production figures after the initial increase to 450,000 bpd [1] Geopolitical Context - The deal is strategically important for the West, aiming to reduce Iraq's reliance on Iran and its influence in the region [3][4] - The U.S. and Great Britain are focused on preventing Iraq from depending on Iranian energy supplies, which currently account for 40% of Iraq's power needs [4] - BP's presence in the Kirkuk region may also serve broader strategic interests for the West, particularly in relation to the semi-autonomous Kurdistan region [5] Strategic Implications - The BP and TotalEnergies deals provide Iraq with a pathway to cease energy imports from Iran and enhance its crude oil and natural gas exports [4] - The geopolitical landscape is shifting, with the U.S. and allies aiming to limit the influence of China, Russia, and Iran in Iraq's energy sector [5]