ConocoPhillips Gains Stake in Iraq Oil Field

Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

Summary

ConocoPhillips said it acquired a minority stake in an oil field in northern Iraq. One of the top producers in OPEC, Iraq is nonetheless locked in by war in the Middle East.

A Minority Stake in Kirkuk

Making good on pledges from President Donald Trump, ConocoPhillips Company on Friday said it reached a deal to join BP plc in the development of oil fields in the Kirkuk region of northern Iraq.

According to Industrial Info Resources data, there are 38 active capital Oil & Gas Production and Pipeline projects in Iraq, with a total investment value of US$14.45 billion. The Industrial Info Resources Global Market Intelligence (GMI) Oil & Gas Production and Pipelines databases offer detailed project reports.

Coming on to support operations in Kirkuk, situated in the semi-autonomous Kurdish north of Iraq, ConocoPhillips said it would secure a 42% interest in a BP division in Kirkuk, working to develop four large-scale oil fields in the region.

"Consistent with our focus on capital discipline, we see an opportunity to create value through a capital-efficient redevelopment program that leverages a large existing production base, while also offering meaningful exploration upside," said Ryan Lance, the chairman and chief executive officer at Conoco. The transaction is expected to close by the end of 2026.

Twenty-seven of the Oil & Gas Production and Pipeline projects being tracked by Industrial Info Resources are located in the Kirkuk region.

Much of the energy industry in Iraq is controlled by state-run energy companies. The state-backed State Company for Oil Projects (SCOP), supported by the Iraqi oil ministry, is behind the largest project by investment value, at $4 billion.

SCOP is planning to rehabilitate and rebuild some 500 miles of 30-inch diameter pipeline for the vital Kirkuk-Baniyas artery. Slated for 300,000 barrels per day (bpd), the decades-old network avoids the Strait of Hormuz, but work might not be done until 2030, data from Industrial Info Resources show.

As part of Kirkuk oil field redevelopment, BP plans to drill new wells, rebuild existing ones and build new infrastructure at the Bai Hassan, Jambur, Khabbaz and other so-called domes in the Kirkuk region.

Conoco said the fields combine for gross recoverable resources of more than 3 billion barrels of oil equivalent.

The deal followed a meeting in Washington D.C. between Trump and Iraqi Prime Minister Ali al-Zaidi. Trump is working to exert U.S. influence in the region not only through the war with Iran, but through commercial agreements with Gulf States.

"The most important strategic partnership in the world is the United States of America" al-Zaidi said on Tuesday. "It's not emotional, it's about money."

The Kirkuk agreement was expected to be signed during al-Zaidi's official visit to Washington, according to news accounts.

Conflict Limiting Iraqi Potential

A few American companies are working in the Iraqi energy sector, with foreign entities such as BP, Italian energy company Eni, and even Russian companies working in the country. Chevron bought a stake in the West Qurna oil field in southern Iraq from Russian oil company Lukoil.

Meanwhile, ongoing fighting in the Middle East has stifled the Iraqi energy industry. Various media reports on Thursday showed drones moving through the skies of northern Iraq this week, while a British maritime risk agency continues to warn of hostilities in and around the Persian Gulf.

While there are arteries through the north to Turkey and to Syria, Iraqi energy goods are more or less trapped behind the Strait of Hormuz because of the U.S.-Iranian naval blockades.

Meanwhile, Iraqi crude oil exports to the U.S. are at a trickle at best. U.S. federal data show Iraqi crude oil imports averaged around 310,000 bpd in February, when fighting began. By April, the level was closer to 134,000 bpd. The United States has received no oil at all from Iraq for at least two weeks.

By the Numbers

• 0 barrels of oil from Iraq to U.S.
• 42% stake for ConocoPhillips in Kirkuk fields

Key Takeaways

• U.S.-based ConocoPhillips invests in Iraq after Trump meeting
• Iraq is largely locked in by conflict in the Middle East

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).