UPDATE 1-Iraq activates contract with BP to develop Kirkuk oilfields, initial target of 328,000 bpd

(Adds minister quote in paragraph 4, details) BAGHDAD, Oct 2 (Reuters) – Iraq has activated a contract with BP to develop Kirkuk oilfields, targeting preliminary production of 328,000 barrels per day, the country's oil minister said on Thursday. The agreement, originally signed earlier this year, involves BP working alongside Iraq’s state-run North Oil Company (NOC) and North Gas Company (NGC) to rehabilitate and expand production at the Baba and Avana domes of the Kirkuk field, as well as the Jambour, Bai Hassan, and Khabbaz fields. The contract sets an initial production target of 328,000 barrels per day, with further increases expected through field development, Iraq's oil minister Hayan Abdel-Ghani said in a statement. "Setting the initial production rate at 328,000 barrels per day marks the launch of the contract, and any increase beyond that will come through development operations," he said. BP is expected to spend up to $25 billion over the lifetime of the project, a senior Iraqi oil official told Reuters in February. The energy major was a member of the consortium of oil companies that discovered oil in Kirkuk in the 1920s. BP has estimated that the Kirkuk field holds about 9 billion barrels of recoverable oil. The company holds a 50% stake in a joint venture operating the giant Rumaila oilfield in the south of the country, where it has been operating for a century. (Reporting by Tala Ramadan and Ahmed Rasheed; Editing by Michael Georgy and Tomasz Janowski)

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