Under the deal, which was signed in Baghdad between Iraq's oil minister Hayan Abdel-Ghani and BP CEO Murray Auchincloss, BP will develop four oil and gas fields in the Kirkuk region, the statement from the Iraqi prime minister's office said.
BP and Iraq's oil ministry signed in 2013 a letter of intent to study the development of the giant Kirkuk oilfield.
Kirkuk is estimated to contain about nine billion barrels of recoverable oil, according to BP.
But that deal was put on hold in 2014 when the Iraqi army collapsed in the face of Islamic State's sweeping advance in northern and western Iraq, allowing the Kurdish regional government (KRG) to take control of the Kirkuk region.
BP will start drawing up a major plan to boost output capacity of crude oil and gas from Kirkuk, Bai Hasan, Jambour and Khabbaz fields, Iraq oil ministry officials said.
The Kirkuk field's reservoir was discovered in 1927 and is where Iraq's oil industry was founded.
Iraq, the second biggest producer in the Organization of the Petroleum Exporting Countries behind Saudi Arabia, currently has the capacity to produce almost 5 million barrels per day.
Rehabilitation of existing facilities, where required, and the construction of new facilities – including gas expansion projects together with a drilling programme at the Kirkuk fields, has the potential to stabilize production and reverse decline, the BP statement added.
Negotiations over the preliminary agreement are expected to be complete early in 2025, said BP.
Baghdad regained full control of the deposit from the regional government in 2017 after a failed Kurdish independence referendum, at which point BP resumed its studies on the field.
In late 2019, BP pulled, opens new tab out of the oilfield in the north of the country after its 2013 service contract expired with no agreement on the field's expansion.
