Iraq has officially endorsed an agreement with UK energy major BP for the development of four oilfields in the northern Kurdish Kirkuk region.

The cabinet gave its final approval to the multi-billion dollar contract at a meeting this week headed by Prime Minister Mohammed Al-Sudani, the official news agency said.

BP expects to invest up to $25 billion into the fields over the lifetime of the project, one of BP’s biggest contracts in the region, AGBI has previously reported.

The agency, quoting a statement by Sudani’s office, said the cabinet authorised the state-owned North Oil Company (NOC) and North Gas Company (NGC) – both of which are based in Kirkuk – to sign the contract with BP for the development of the fields.

In a statement last month, BP said that it had reached agreement on all contractual terms with Opec producer Iraq to provide for the rehabilitation and redevelopment of the four oil and gas fields, with the potential for investment in exploration. 

The agreement was subject to final governmental ratification, BP said at the time.

Iraqi oil minister Hayan Abdel Ghani said later that the project would boost the four fields’ production by nearly 450,000 barrels per day (bpd), and increase natural gas production to at least 400 million cubic metres per year.

The contract covers the Baba and Avanah domes of the Kirkuk oil field, along with the Bai Hassan, Jambur and Khabbaz fields, all of which are operated by Iraq NOC.

Discovered in 1927, the fields contain recoverable crude deposits of nearly 9 billion barrels, according to the Iraq oil ministry.

After more than 40 years of nearly continuous war or economic sanctions, beginning with the Iran-Iraq war in 1980, Iraq is trying to rehabilitate its oil and gas facilities with the aim of increasing crude output capacity to six million bpd within three years.

It produces about four million bpd now.