Iraq has approved plans to create a new company to finance the giant Rumaila oil field operated by BP, said the oil minister late last month, as the UK major seeks to limit its exposure to high carbon intensity energy assets.
"The Council of Ministers approved the establishment of Basra Energy Company to be the financing entity for the development of the giant Rumaila field, and it will become one of the most important pillars of the energy transition, and an important element of sustainable development in Iraq," Ihsan Ismaael said.
Basra Energy Company Ltd. (BECL) will be wholly owned by BP and PetroChina, said the company.
"Subject to relevant approvals and clearances, this is expected to be the new company through which BP and PetroChina will own and manage their interests at the Rumaila field in Iraq," it said.
"It is expected to enable optimized and continued investment throughout the duration of the existing technical service contract -- due to expire at the end of 2034 -- including enhanced access to external financing."
The Rumaila Operating Organization currently operates the field, acting under the supervision and management of BP, as lead contractor, alongside the other partners. BP has a 47.6% stake in Rumaila Operating Organization, PetroChina 46.4% and remainder held by state-owned Basra Oil Co. and State Oil Marketing Organization.
"Subject to the approvals and clearances, ROO will remain operator and it is expected BECL will assume the lead contractor role under the existing TSC, with limited change at the operational level at ROO," BP said in a statement.
Rumaila, estimated to have 17 billion barrels of recoverable oil remaining, pumped a maximum of around 1.5 million b/d over the past few years under the technical service contract.
Rumaila's carbon intensity is 15.02 g of CO2 equivalent per megajoule, compared with a country average of 13.717 grams of CO2e/MJ, according to data from Stanford University.
BP responded to the global price crash by cutting capital expenditure 21% in 2020, starting in the second quarter, and expects to see its production fall 40% by 2030 as it shifts to lower-carbon energy.
