British oil and gas company BP has signed an initial agreement with Iraq to negotiate the development of Kirkuk oil and gas fields.
Negotiations are expected to be completed early next year, the London-headquartered company said on Thursday.
The non-binding agreement included oil and gas investment, power generation, introduction of solar energy facilities and further exploration activities, it added.
The pact was signed in Baghdad in a meeting between Iraqi Prime Minister Mohammed Al Sudani and BP chief executive Murray Auchincloss on Thursday.
It will cover the Baba and Avanah domes and three adjacent fields - Bai Hassan, Jambur and Khabbaz - in Iraq, that are operated by government-owned North Oil Company.
Iraq’s Kirkuk oilfield is one of the largest and oldest oilfields in the world, and its Baba and Avanah domes are known for large reserves of crude oil. These domes are the upper portions of large underground reservoirs where oil and gas have accumulated over millions of years due to the geological formations.
“We see today’s signing as an important step towards the potential further development of this critically important area. It aligns with BP’s six clear priorities and is in support of our drive to deliver as a simpler, more focused, higher value company,” Mr Auchincloss said.
BP was a member of the consortium of oil companies that discovered oil in Kirkuk in the 1920s.
From 2013 to 2019, it worked with the Ministry of Oil and North Oil Company on technical studies exploring the potential for redevelopment at Kirkuk.
Iraq is working to address its power shortages and upgrade its energy infrastructure.
Despite being the second-biggest producer in Opec bloc, Iraq is dependent on Iran for about a third of its electricity needs. It buys electricity and natural gas to generate power from its neighbour but still has electricity shortfalls that result in extended power cuts across the country.
The rehabilitation of existing facilities and the construction of new ones, including gas expansion projects and a drilling programme at the Kirkuk fields, could stabilise production and reverse its decline, putting this vital oilfield back on a growth trajectory, BP said.
It could bring investment and opportunities to the Kirkuk region, spurring future growth in downstream industries. It could also add tangible benefits for the local population, including job creation and increased demand for local suppliers.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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Political flags or banners
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Bikes, skateboards or scooters
