By Kazhan Abdullah
In early February 2025, British oil major BP reached a significant agreement with the Iraqi government to redevelop four oil and gas fields in the Kirkuk region. The deal, structured as a profit-sharing agreement over more than 25 years, involves BP investing up to $25 billion.
This agreement marks BP’s return to the Kirkuk fields after previous efforts were disrupted by regional conflicts and political instability. BP was part of the consortium that discovered oil in Kirkuk in the 1920s and has estimated that the area holds about 9 billion barrels of recoverable oil.
Nevertheless, this transaction is an element of Iraq’s wider initiative to draw in foreign investment and restore its oil sector’s vitality, following a comparable $27 billion agreement with France’s Total Energies in Basra. The agreement has, however, elicited concern from the Kurdistan Regional Government (KRG), owing to the contested territorial claim between Erbil and Baghdad over Kirkuk.
KRG Prime Minister Masrour Barzani has called for a trilateral meeting to ensure that any developments in disputed territories are conducted collaboratively and in accordance with the Iraqi constitution.
The Kurdistan Regional Government (KRG) has expressed significant concerns regarding the recent agreement between the Iraqi federal government and BP to redevelop oil and gas fields in the Kirkuk region. KRG officials assert that such agreements must involve the semi-autonomous Kurdish region, emphasizing that Kirkuk is a disputed territory under the Iraqi constitution. They argue that unilateral decisions by Baghdad concerning these areas are unconstitutional.
Moreover, KRG Prime Minister Masrour Barzani has called for a trilateral meeting involving Erbil, Baghdad, and international stakeholders to ensure proper coordination and adherence to constitutional provisions
the Kurdistan Region’s growing economic isolation, as international oil investments increasingly flow through Baghdad rather than Erbil.
Historically, the Kurdistan Regional Government (KRG) autonomously exported Kirkuk’s oil via Turkey’s Ceyhan pipeline. This agreement may strengthen Baghdad’s authority over Kirkuk’s resources, thereby diminishing Erbil’s capacity for independent oil export management.
BP’s investment in Kirkuk signifies a resurgence of international corporate confidence in Iraq’s oil sector. Despite this, the Kurdistan Region’s oil sector continues to be excluded from direct foreign investment due to persistent legal disagreements with Baghdad regarding contracts signed with foreign companies.
Furthermore, Kirkuk is a disputed territory claimed by both the KRG and the federal government of Iraq. The BP deal serves to solidify Baghdad’s administrative and financial dominance in Kirkuk, thus diminishing the KRG’s claim to the area.
The success of this agreement would establish a precedent for Baghdad to independently negotiate future energy accords concerning other contested territories.
As a result, the BP-Iraq Kirkuk deal presents a considerable challenge to the KRG’s quest for economic and political autonomy. The agreement, by centralizing Baghdad’s authority over Kirkuk’s oil fields, diminishes Erbil’s negotiating power regarding revenue distribution and territorial conflicts. This agreement underscores the Kurdistan Region’s increasing economic isolation, as international oil investment is increasingly channeled through Baghdad instead of Erbil.