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(Bloomberg) — BP Plc is looking for a partner to help ramp up production and share some costs at one of the Middle East’s oldest oil fields, according to people with knowledge of the situation.
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A process is already underway to find potential investors for Iraq’s Kirkuk oil field, the people said, asking not to be named because the information isn’t public. The timing of any agreement is uncertain, with one person saying they expected the process to continue into next year.
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Major oil companies are showing renewed interest in Iraq, which holds prolific deposits of crude that is often easier and cheaper to produce than areas outside of the Middle East. BP is seeking more international growth in oil and gas production, turning away from a failed five-year embrace of clean energy and net zero.
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The Kirkuk development contract signed last year is a key part of BP’s efforts to improve earnings. Media reports at the time indicated annual costs would be about $1 billion over the course of the 25-year contract, which covers development of the Baba and Avanah domes of the Kirkuk oil field and three adjacent deposits.
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BP declined to comment. Iraq’s Oil Ministry didn’t immediately respond to requests for comment.
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The Middle East is one of BP’s top producing regions along with fields in the US Gulf of Mexico. In addition to Kirkuk, BP cooperates in running Iraq’s biggest field, Rumaila in the south of the country.
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BP’s forebears formally discovered the Kirkuk field in 1927. Crude flowed from the reservoir 10 years before Saudi Arabia struck oil and two decades before the kingdom found the giant Ghawar field.
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Kirkuk’s oldest well, Baba Gurgur, or “Father of Fire” in Kurdish, earned its name for the flames fed by hydrocarbons oozing to the surface in a nearby pit. Local lore holds that the fire has been burning for centuries.
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BP’s plan to nearly double Kirkuk’s output capacity plays into Iraq’s ambition to boost export earnings. OPEC’s second-largest producer behind Saudi Arabia aims to increase oil and gas production capacity to more than 6 million barrels a day by 2029.
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The amount of money BP receives from the field will be linked to its ability to boost output and limit costs. Iraq’s Oil Minister Hayyan Abdul Ghani Kirkuk told reporters last year that he expects Kirkuk to ramp up to about 600,000 barrels a day, from just over 300,000 barrels a day now.
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—With assistance from Khalid Al-Ansary and Mitchell Ferman.
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