BP Considering Plan to Spin Off Iraq Operations Into New Company, Sources Say
By Sarah McFarlane and Benoit Faucon
LONDON -- BP PLC is working on a plan to spin off its operations
in Iraq into a stand-alone company, according to people familiar
with the matter, as the oil giant shuffles its assets and
investment plans in its pivot toward lower-carbon energy.
The new company would hold BP's interest in Iraq's giant Rumaila
oil field -- one of the world's largest -- and be jointly owned by
China National Petroleum Corp., one of the British company's
partners at the site, the people said. The new entity would hold
its own debt, separate from BP, and is expected to distribute
profits via dividends, the people added.
The plan is aimed at giving BP more flexibility to invest in
low-carbon energy by enabling it to reduce its spending on oil and
gas, the people said.
Any such move would underscore how some European oil companies
are backing away from decades of pioneering exploration in
sometimes challenging locations to refocus on where future energy
demand is expected to grow: low-carbon fuels and electricity.
The potential move would have particular significance for BP
because of its history in Iraq, dating to the 1920s. BP was the
first international oil business to return to Iraq after the
For BP to go ahead with a new company for its Iraqi operations,
it would first need to secure the agreement of state-backed Basra
Oil Company and Iraq's national oil company, the State Organization
for Marketing of Oil, or SOMO, which are part of the Rumaila
BP's plan for its Iraqi business is similar to what it recently
said it was considering in Angola, the people familiar with the
--Ben Dummett contributed to this article.
(END) Dow Jones Newswires
June 11, 2021 11:18 ET (15:18 GMT)
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