Iraq gives BP final approval to produce oil in Kirkuk

British company BP has received final approval from the Iraqi government to develop huge oil fields in Kirkuk. The deal will be based on a profit-sharing model, and will last for more than 25 years. BP plans to invest about $25 billion in the project to produce around 3 billion barrels of oil.

According to the Iraqi government, 245,000 barrels of oil per day are currently produced in Kirkuk's fields. The state's deal with BP will boost the progress of the country, whose economy is heavily dependent on crude oil exports, says Alex Kimani of Oilprice.com.

In recent years, Iraq has been actively redeveloping abandoned energy sites and attracting foreign investors. For example, last year the government signed an agreement with France's TotalEnergies for a $27 billion oil, gas and renewable energy project.

After years of geopolitical instability in Iraq, Kimani says such deals increase the chances of other foreign investors returning to the country.