Iraq, BP to sign deal to boost Kirkuk oil production capacity

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KIRKUK, Iraq, Jan 18 (Reuters) - Iraq aims to sign a deal with BP on Thursday to boost production capacity from the northern Kirkuk oilfields, which were taken back in October by Iraqi government forces, an Iraqi oil official said.

Oil Minister Jabar al-Luaibi will attend the ceremony to sign the agreement at the offices of Iraqi state-run North Oil Company which operates the fields, he told Reuters.

Iraq had asked BP to boost Kirkuk's output capacity to more than 700,000 barrels per day, more than twice existing capacity, days after Iraqi forces dislodged Kurdish fighters from the area.

Oil exports from the field, transported by pipeline to Turkey, came to a halt after the Iraqi military operation, which was in retaliation to an independence referendum held on Sept. 25 by the semi-autonomous Kurdistan Regional Government (KRG).

Iraq plans to start trucking crude from Kirkuk to Iran at the end of the month. In October, Luaibi held talks with BP's president for the Middle East region, Michael Townshend, on reactivating a deal signed in 2013 with the firm to help Baghdad halt a huge decline in output from Kirkuk.

The KRG took control of the Kirkuk region in 2014, when the Iraqi army collapsed in the face of Islamic State's sweeping advance in northern and western Iraq. The Kurdish move prevented the fields from falling into the hands of the militants.

Kirkuk is one of the biggest and oldest oilfields in the Middle East, still estimated to contain about 9 billion barrels of recoverable oil, according to BP.

BP has provided technical assistance in the past to the North Oil to aid the redevelopment of the Kirkuk field. (Reporting by Huda Majeed; Writing by Maher Chmaytelli; Editing by Jason Neely and Edmund Blair)