ConocoPhillips Takes 42% Stake in BP's Kirkuk Venture as Iraq Eyes Production Recovery
Iraq's oil production has fallen from 4 million to 1.4 million barrels per day since the war, and ConocoPhillips just bought into BP's Kirkuk comeback.
OPEC+ looks set to pause its phased output increases after September, according to a Reuters report published Monday (2026-07-28). The group's 188,000-barrel-per-day September addition is expected to mark the end of its rollback of a 1.65 million barrel-per-day supply cut agreed in 2023. For US oil majors negotiating over Iraq's damaged production base, the pending pause matters less than what it leaves unresolved.7
Iraq's oil output has fallen from roughly 4 million barrels per day before the Iran war to around 1.4 million, finance.yahoo.com reported Monday (2026-07-28). That two-thirds collapse drew American companies to Washington alongside Iraqi Prime Minister Ali Al-Zaidi during his visit in the week of July 13 (2026-07-13).7
ConocoPhillips agreed to buy a 42% interest in BP Energy Company of Kirkuk, the development subsidiary BP is using to redevelop four major oilfields in the Kirkuk region of northern Iraq. Energy Voice reported on July 20 (2026-07-20) that the deal was signed during the Washington visit. BP has not disclosed financial terms.6,4
Barclays analysts put the transaction at approximately $400 million, according to a note cited by Rigzone on July 17 (2026-07-17). The Kirkuk complex currently produces around 328,000 barrels per day, the bank said, with operators rewarded for volumes above that threshold — a contract structure the bank described as comparing favorably to Iraq's traditional service fee arrangements.5
The resource itself is large. The development and production contract targets an initial phase covering more than 3 billion barrels of oil equivalent across the four fields, Rigzone and oilprice.com reported on July 17 (2026-07-17). Kirkuk is one of Iraq's oldest oilfields and has experienced significant output decline since the Iran war began. BP CEO Meg O'Neill, cited by Energy Voice, called it "a world-class resource base."3,4,6
ConocoPhillips was not acting alone. The company was among dozens of US firms from energy, healthcare, finance and technology that signed approximately $60 billion in deals to support Iraq's economy during the Washington visit, Rigzone reported on July 17 (2026-07-17).5
Chevron is pursuing a parallel position in the south. The supermajor was set to sign two memoranda of understanding on Friday (2026-07-10) covering West Qurna 2, a field now producing around 460,000 barrels per day after Iraq nationalized the asset following US sanctions on Russia's Lukoil, oilprice.com reported on July 16 (2026-07-16). West Qurna 2 alone accounts for roughly 0.5% of global supply and 10% of Iraq's remaining output.2,7
The pricing backdrop has sharpened appetite. Oil prices surged on Tuesday (2026-07-14) to above $87 a barrel, their highest in more than a month, after the US announced a naval blockade on Iran in the Strait of Hormuz, representing a 21% gain from the $71.57 a barrel recorded on July 1, the Motley Fool reported. ICE Brent front-month was trading at $87.32 a barrel as of Wednesday morning (2026-07-29).1
High prices improve returns on paper. But they do not address the infrastructure and security constraints that have held Kirkuk's production at 328,000 barrels per day, well below the field's pre-war output. ConocoPhillips is paying, by Barclays' estimate, around $400 million for a 42% stake in the rehabilitation prospect. OPEC+ plans to pause after September's addition, removing one supply buffer to any Iraqi recovery. The pace at which BP and ConocoPhillips can push volumes above the current Kirkuk baseline, in a region still experiencing war-related disruption, is the variable neither the deal announcement nor the Barclays price estimate resolves.5,7,3