ConocoPhillips buys 42% of BP's Kirkuk oilfields as Iraq courts US investment

ConocoPhillips agreed to acquire a 42% stake in BP's Kirkuk oil venture, gaining access to four producing fields with more than 3 billion barrels of recoverable resources in northern Iraq.

"This unique redevelopment opportunity is well aligned with our disciplined investment framework, providing access to a material, high-quality and long-life resource base," Ryan Lance, chairman and chief executive officer at ConocoPhillips, said.

The deal covers the Baba and Avanah domes of the Kirkuk field plus three adjacent fields — Bai Hassan, Jambur and Khabbaz — all currently producing. The transaction is expected to close by the end of 2026 with an effective date of July 1, with ConocoPhillips accounting for the venture as an equity affiliate. The company said it does not expect significant capital contributions, with remuneration tied to a proportionate share of incremental production and costs.

The agreement comes as Iraqi Prime Minister Ali al-Zaidi visits Washington this week seeking major U.S. investment in oil, gas and power sectors after the Iran war reduced crude output and strained state finances. Chevron separately signed memorandums of understanding for the West Qurna 2 and Nassiriya fields, signaling a broader push to reengage American energy companies in Iraq's hydrocarbon sector.

The Kirkuk fields have been a flashpoint in Iraq's oil politics for decades. BP first entered the region under a technical service agreement in 2013, and the assets were disrupted by the Islamic State's advance in 2014 and subsequent disputes between Baghdad and the Kurdistan Regional Government. The redevelopment program includes field rehabilitation, optimization and additional exploration beyond the initial 3-billion-barrel resource base.

ConocoPhillips, which has a market capitalization of about $137 billion and has paid dividends for 56 consecutive years, traded at $112.84 a share Friday, up 1.24%. The stock rose a further 1.29% in pre-market trading to $114.30. Mizuho projects second-quarter earnings per share mostly in line with expectations, though free cash flow may come in about 7% below consensus due to higher capital expenditures and weaker gas realizations, according to a recent note.

The broader regional backdrop adds complexity. Oil loadings at Iraq's Basra terminals were briefly suspended this week after a drone struck a tanker, while Brent crude rose 2% to above $85 a barrel on renewed U.S.-Iran hostilities and the threat of Red Sea closure. The International Energy Agency warned that global energy security is at risk if the Strait of Hormuz does not reopen within weeks. China's oil imports, meanwhile, plunged to a near 10-year low in June as the Iran war disrupted supply routes.

For Iraq, the ConocoPhillips deal represents a strategic pivot toward U.S. partners as it seeks to restore production capacity and attract foreign capital. The country's oil output has been constrained by the Iran conflict, and the Kirkuk redevelopment could add meaningful supply over the medium term — though execution risk remains high given the security environment and the complex politics of Iraq's energy sector. The last time a major U.S. oil company made a significant entry into Iraq's Kirkuk region was ExxonMobil's involvement in the West Qurna 1 field more than a decade ago, a project that faced repeated delays from infrastructure bottlenecks and political disputes.

This article is for informational purposes only and does not constitute investment advice.