BP has officially begun work on a massive $25 billion partnership with Iraq to overhaul oil and gas operations in the northern province of Kirkuk.

According to Iraqi energy officials, BP engineers are carrying out early assessments at four key oilfields, a first step in a multi-phase redevelopment project. The agreement, which was finalized in March, focuses on modernizing infrastructure and boosting the output of Iraq’s state-run North Oil Company (NOC) and North Gas Company (NGC).

The initiative covers the Baba and Avanah domes of the Kirkuk oilfield, along with Bai Hassan, Jambur, and Khabbaz—sites believed to hold vast untapped reserves. Initial plans target production equivalent to more than 3 billion barrels of oil, while the wider region may hold as much as 20 billion barrels, BP estimates.

BP Chief Executive Murray Auchincloss has described the deal as a major opportunity that fits into the company’s broader strategy to expand its upstream oil and gas portfolio.

For Iraq, the agreement comes at a pivotal moment. The government has set an ambitious goal of raising national output to over 6 million barrels per day (bpd) by 2029, up from its current capacity of around 4.5 million bpd. Kirkuk’s current production—between 285,000 and 330,000 bpd—mostly serves domestic needs, with limited exports to Jordan.

Once development work is complete, production from the Kirkuk fields could climb by an additional 50,000 to 100,000 bpd in the coming years, Iraqi officials said.

Analysts view the partnership as a critical step in revitalizing one of Iraq’s most historic oil regions while providing BP with long-term access to one of the Middle East’s largest resource bases.