Introduction
The Agreement that Revitalizes Kirkuk
On July 17, 2026, BP and ConocoPhillips signed an agreement to rehabilitate the Kirkuk oilfields in Iraq, with the goal of restoring a historical production capacity. The overall investment is estimated at $25 billion, financing the recovery of over 3 billion barrels equivalent of oil and gas in the Baba and Avanah domes, Bai Hassan, Jambur, and Khabbaz fields. The current production capacity of the region is estimated at approximately 150,000 barrels per day (bpd), with a target increase of +34% by 2030. The project will be developed on an existing pipeline network that is 700 km long and currently in a state of degradation due to years of insufficient maintenance.
This agreement is not simply a renewal of operations: it represents a structural attempt to stabilize the global energy flow through the entry of a major American company into a strategic hub, reducing dependence on vulnerable routes in the Red Sea and the Suez Canal. The intervention was formalized during the official visit of the Iraqi Prime Minister Ali al-Zaidi to Washington D.C., with the goal of strengthening the bond between Baghdad and the United States in an unstable geopolitical context. Management will be entrusted to BP Energy Company of Kirkuk Limited (BP ECKL), with ConocoPhillips now holding a 42% stake.
Infrastructure at the Heart of Resilience
The Kirkuk oil fields are part of a complex system: the existing infrastructure, built in the 1970s, exhibits significant structural degradation. The rehabilitation includes restoring 18 pumping stations, replacing approximately 230 km of carbon steel pipelines with anti-corrosion coating, and installing automated systems for pressure monitoring. The average repair time after an outage is estimated at 34 days, a critical factor for maintaining flow continuity.
The operating system relies on a logistics chain that starts from the field and reaches the Khor Al-Zubair terminal in the Persian Gulf. Pipeline transport covers 420 km, with a maximum throughput of 180,000 bpd under optimal conditions. The current effective capacity is 27% lower than the design level due to repeated compressor failures and undetected leaks. The current remote control system, based on legacy SCADA protocols, requires updates to reduce response time in case of anomalies.
Who Pays and Who Benefits?
The costs of the project will be primarily borne by BP (58%) and ConocoPhillips (42%), with partial funding through loans guaranteed by the Iraqi government. The estimated cost for rehabilitating the infrastructure is $2.8 billion, to which are added $1.6 billion for the purchase of materials and transportation to the site. The increase in production will bring an estimated profit of 3.2 billion dollars per year for the two operators within the fifth operating year.
For Iraq, the resumption of production is crucial: current exports have been reduced to approximately 400,000 bpd, compared to a historical capacity of over 3 million. The Iraqi government expects an increase in tax revenue from $28 billion to $56 billion by 2031 thanks to the return of production. However, hidden costs include the local environmental impact: reactivating these areas has already caused a 40% increase in local CO₂ emissions in three months.
Closure
The agreement between BP and ConocoPhillips is not just a financial move: it’s a systematic reconfiguration of the global energy supply chain. The project, with its capacity to generate +150,000 bpd, represents one of the largest infrastructure interventions in the Middle East in the last ten years. The direct effect is an increased resilience of the flow towards Europe and Southeast Asia.
The real trade-off is measured in terms of exposure: while Western producers reduce dependence on vulnerable routes, Iraq takes on a central role in revitalizing the global energy system. The key figure is that the project will increase the net flow to external markets by +150,000 bpd by the end of 2027, with a direct impact on the spread between Brent and Dubai prices.
The two indicators to monitor in the coming months are: the daily traffic of pipelines towards Khor Al-Zubair (minimum target: 190,000 bpd by December) and the variation in spot price on the Dubai market (+2.3% compared to the average level of the first half of the year). The project demonstrates that logistical control is no longer an abstract strategic issue: it’s a material operation involving pipes, compressors, and contracts. Those who hold the operational key to this infrastructure, even in unstable contexts, have real access to the global flow.