British Petroleum (BP) and PetroChina have formed a joint venture to manage the giant Rumaila oil field in Iraq, a structural operational model adopted by the major British oil company in other parts of the world, where it is focusing on transitioning away from fossil fuels. BP is at the beginning of its transformation towards reducing emissions and producing hydrocarbons while increasing clean energy production. This strategy is "uncomfortably" aligned with its presence in Iraq, one of the largest methane emitters in the world, a greenhouse gas more potent than carbon dioxide.
The company stated that the new Basra Energy Limited will manage the Rumaila field in partnership with the state-owned Basra Oil Company, and as an independent company, it will be able to secure external financing. While the formation of the venture will not change the amount of greenhouse gases emitted, it will free up capital as BP seeks to increase spending on low-carbon projects.
In 2016, BP formed Aker BP ASA by merging its Norwegian assets with Det Norske Oljeselskap. Recently, BP and Italian company Eni SpA announced they were considering merging oil, gas, and natural gas assets in Angola in an attempt to revitalize production.
**Government Approval**
Oil Minister Ihsan Abdul Jabbar stated in a separate announcement that the Iraqi Cabinet approved the restructuring, adding that Basra Energy will be responsible for financing and developing the field. The Iraqi project is subject to other approvals. BP acquired the right to develop the Rumaila field in 2010, and the new joint venture is expected to operate until the contract expires in 2034. The field is one of the largest in the world, producing 1.4 million barrels per day in 2020.
The Iraqi oil minister mentioned in July that BP wanted to withdraw from Rumaila, although he later added that the government is working to improve operating conditions for foreign oil companies and halt their exit. Iraq pumps about 4 million barrels of crude oil per day, more than any other member of the Organization of the Petroleum Exporting Countries (OPEC) except Saudi Arabia. However, international energy companies have expressed concerns in recent years due to political instability and challenging contracting terms. Notably, ExxonMobil is trying to sell its stake in the West Qurna 1 field, while Total and Lukoil also want to divest some assets.
BP's presence in Iraq dates back to the 1920s when its predecessors helped discover the Kirkuk field in the north of the country. The company withdrew from the field last year.
