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ConocoPhillips to Buy 42% Stake in BP Iraqi Development

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ConocoPhillips (COP) will buy a 42% interest in BP Energy Company of Kirkuk in Iraq, it said on Friday, after agreeing terms with BP (BP).

ConocoPhillips will thus support redevelopment of four large-scale operational fields in the Kirkuk area of northern Iraq. The deal is due to be signed during Iraqi Prime Minister Ali al-Zaidi's visit to Washington, DC.

BP ECKL holds the Development and Production Contract, or DPC, covering the Baba and Avanah domes of the Kirkuk oil field plus three adjacent fields in Federal Iraq - Bai Hassan, Jambur and Khabbaz.

The DPC includes initial gross recoverable resources of more than 3 billion barrels of oil equivalent, that will be recovered through field rehabilitation, redevelopment and optimization.

The contract also contains areas for exploration. The deal is due to close by the end of this year, subject to regulatory approvals.

After deal closure, the BP ECKL joint venture will be accounted for as "an equity affiliate" and it is not expected to need significant capital outlays from ConocoPhillips.

Remuneration will be linked to a proportionate share of incremental production and costs.

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