BP, Iraq to Rehabilitate Kirkuk Oilfields After Years of Disputes

BP plc (BP), the UK supermajor, has entered into a preliminary agreement with the government of Iraq to rehabilitate and develop four significant oil and gas fields in the northern Kirkuk region. This deal marks a renewed effort to boost production and reverse the decline in one of Iraq's most historically important oilfields.A New Chapter for Kirkuk's OilfieldsThe agreement followed a previous deal from 2013, which was focused on developing the giant Kirkuk field. However, it was put on hold due to the advance of the Islamic State (IS) across the Middle East. The Kirkuk field, which is estimated to hold about 9 billion barrels of recoverable crude, has since been the subject of territorial disputes, particularly following the war with IS. The autonomous region of Kurdistan laid claim to the Kirkuk field, complicating BP's deal with the central Iraqi government.Focus on Rehabilitation and ExpansionAccording to BP, the new agreement will involve a comprehensive approach to stabilizing and increasing production at the Kirkuk fields. The plan includes rehabilitating the existing facilities, constructing new infrastructure, including gas expansion projects, and launching a drilling program. These efforts are expected to stabilize production and eventually return the Kirkuk oilfield to a growth trajectory.Geopolitical Challenges and Oil OperationsKirkuk, being the birthplace of Iraq’s oil industry, holds its own significance. However, in recent years, operations in the region have been fraught with challenges due to disputes between the central government in Baghdad and the Kurdish regional government over control of the oil fields and their revenues.The situation became more complex after a 2023 ruling by the International Chamber of Commerce (ICC) in a dispute between Iraq and Turkey. The ICC ruled in favor of Iraq, stating that Turkey should not allow Kurdish oil exports via the Iraq-Turkey pipeline without the approval of the Iraqi federal government. This led to the suspension of oil shipments from Kurdistan to Turkey that has been in effect for more than a year now. The suspension has also given rise to rampant smuggling of oil from northern Iraq into Turkey and Iran.Strategic Importance for Iraq and BPIraq, as the second-largest oil producer within OPEC, views the Kirkuk fields as critical to its oil production strategy. The collaboration with BP is seen as a significant step toward restoring production levels and ensuring long-term stability in the region. For BP, the deal represents an opportunity to reaffirm its presence in Iraq and contribute to the recovery of a key oil-producing region.Negotiations over the preliminary agreement are expected to be finalized by early 2025, marking a new chapter in the collaboration between Iraq and BP.Zacks Rank & Key PicksBP currently carries a Zack Rank #3 (Hold).Investors interested in the energy sector may look at some better-ranked stocks like SM Energy Company SM, Northern Oil and Gas, Inc. NOG and Hess Corporation HES. While SM Energy currently sports a Zacks Rank #1 (Strong Buy), Northern Oil and Gas and Hess carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.09. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days.Northern Oil and Gas’ core operations are focused on three leading basins of the United States — the Williston, Permian and the Appalachian. The upstream operator employs a unique nonoperating business model, which helps it to lower costs and increase cash flow.The Zacks Consensus Estimate for NOG’s 2024 EPS is pegged at $5.18. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.Hess operates primarily in two areas — the Bakken shale and the Stabroek project offshore Guyana. It is currently in the process of being acquired by supermajor Chevron in an all-stock deal worth $53 billion. HES currently has a Growth Score of A.The Zacks Consensus Estimate for 2024 and 2025 EPS is pegged at $10.97 and $12.55, respectively. The company has witnessed upward earnings estimate revisions for 2024 in the past 30 days.Free Report – 3 Stocks Sneaking Into Hydrogen EnergyDemand for clean hydrogen energy is projected to reach $500 billion by 2030 and grow 5-FOLD by 2050. No guarantees, but three companies are quietly getting the jump on their competition.Zacks Investment Research is temporarily offering an urgent Special Report naming and explaining these emerging powerhouses primed to boom. Click below for Hydrogen Energy: 3 Industrial Giants to Ride the Next Renewable Energy Wave.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BP p.l.c. (BP): Free Stock Analysis Report Hess Corporation (HES): Free Stock Analysis Report SM Energy Company (SM): Free Stock Analysis Report Northern Oil and Gas, Inc. (NOG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks