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ConocoPhillips has agreed to acquire a 42% interest in BP Energy Company of Kirkuk Limited from BP, marking its entry into the redevelopment of some of Iraq’s largest producing oil fields and expanding its exposure to long-life, low-cost conventional resources.

The agreement, expected to be formally signed during Iraqi Prime Minister Ali al-Zaidi’s visit to Washington, D.C., gives ConocoPhillips a stake in the development and production contract covering the Baba and Avanah domes of the Kirkuk field, along with the nearby Bai Hassan, Jambur, and Khabbaz fields in federal Iraq. Together, the assets contain an initial gross recoverable resource estimated at more than 3 billion barrels of oil equivalent, with additional exploration potential beyond the currently identified reserves.

Chief Executive Ryan Lance said the transaction fits ConocoPhillips’ disciplined investment strategy by providing access to a large, long-life resource base that meets the company’s cost-of-supply requirements. He added that the company expects to create value through capital-efficient redevelopment of existing producing fields while also benefiting from future exploration opportunities.

Unlike a traditional acquisition requiring significant upfront development spending, ConocoPhillips said the investment is not expected to require substantial capital contributions after closing. Instead, the joint venture will be accounted for as an equity affiliate, with the company’s returns tied to its share of incremental production and associated costs.

The transaction is expected to close by the end of 2026, subject to regulatory approvals and customary closing conditions, with an effective date of July 1, 2026.

The deal strengthens ConocoPhillips’ international upstream portfolio while supporting Iraq’s efforts to rehabilitate and expand production from the historic Kirkuk region, one of the Middle East’s oldest and most prolific oil-producing provinces. The investment also aligns with a broader industry trend of international oil companies returning to large, lower-cost conventional assets as global demand for oil remains resilient and governments seek to maximize output from existing fields.

This post appeared first on https://oilprice.com