BP And ConocoPhillips Are Pouring Billions Into Iraq. The Bigger Goal Is Reducing Iran’s Energy Influence.

ConocoPhillips has agreed to acquire a 42% stake in BP Energy Company of Kirkuk Limited, expanding its footprint in northern Iraq at a time when the United States and Iraq are working to strengthen energy ties and reduce the region's dependence on routes vulnerable to disruption.

The transaction, which is expected to close by the end of the year pending regulatory approvals and customary closing conditions, gives ConocoPhillips exposure to some of Iraq's largest producing oil fields. The announcement coincides with Iraqi Prime Minister Ali Al-Zaidi's official visit to Washington and broader discussions around U.S. investment in Iraq's energy sector.

ConocoPhillips said the acquisition supports the redevelopment of the Baba and Avanah domes of the Kirkuk oil field, along with the nearby Bai Hassan, Jambur and Khabbaz fields in northern Iraq. The company described the assets as a "material, high-quality and long-life resource base," according to CNBC.

"This unique redevelopment opportunity is well aligned with our disciplined investment framework," ConocoPhillips CEO Ryan Lance said in a statement cited by CNBC. The company did not disclose financial terms of the transaction.

The British energy giant finalized an agreement with the Iraqi government in 2025 to redevelop oil and gas resources in Kirkuk. BP CEO Meg O'Neill said the fields represent a "world-class resource base" capable of supporting Iraq's long-term energy ambitions while creating value for both the country and the company.

The announcement comes against the backdrop of renewed geopolitical tensions in the Middle East. Energy markets have remained focused on the Strait of Hormuz after hostilities between the United States and Iran earlier this year raised concerns about potential disruptions to one of the world's most important oil transit routes. Roughly one-fifth of global oil shipments pass through the waterway, according to data previously published by Reuters.

Washington has increasingly encouraged investment in Iraq's energy infrastructure as part of broader efforts to strengthen Baghdad's economic independence. Iraq has long relied on imports of Iranian electricity and natural gas to meet domestic demand, although officials have sought to diversify supply sources in recent years, according to Reuters.

Prime Minister Al-Zaidi's trip to the United States included meetings with several major energy and industrial companies. His office said discussions were held with executives from Halliburton, Shell, Honeywell, Weatherford and Baker Hughes in Houston, covering investment opportunities, technology partnerships and participation in large-scale projects, according to CNBC.

Iraq remains OPEC's second-largest oil producer and is pursuing plans to increase both crude output and natural gas development. The country possesses an estimated 145 billion barrels of proven oil reserves, placing it among the world's largest holders of crude resources, according to The Energy Institute's Statistical Review of World Energy 2026.

The Kirkuk field itself is one of Iraq's oldest and most significant oil assets. First discovered in 1927, it has played a central role in the country's petroleum industry for decades and remains a major contributor to production in northern Iraq, according to Encyclopaedia Britannica and historical records maintained by Iraq's Ministry of Oil.

The agreement also reflects continued interest from international oil companies in Iraq despite periods of political instability and security challenges. In recent years, Baghdad has sought to attract foreign investment through long-term development agreements aimed at increasing production capacity and modernizing infrastructure.

Neither BP nor ConocoPhillips indicated whether additional investments related to the Kirkuk project would be announced during Prime Minister Al-Zaidi's visit. Both companies said the transaction remains subject to customary approvals and is expected to close before the end of 2026.