* Iraq oil minister, BP CEO visit Kirkuk oilfield
* Kirkuk governor pledges full support for BP deal
* BP to boost output from Kirkuk oilfield
By Mustafa Mahmoud and Ahmed Rasheed
KIRKUK, Iraq/BAGHDAD Nov 6 (Reuters) - Iraq's oil ministerand the boss of BP paid a rare visit to Kirkuk onWednesday to win over the local government before the Britishcompany starts work on this controversial northern oilfield thatstraddles the border with autonomous Kurdistan.
Baghdad signed a deal in early September for BP to revivethe giant oilfield, allowing the company to negotiate access tosignificant reserves in the north in return for helping toarrest a huge decline in output.
Kirkuk's oil riches are at the core of a crisis within thenational government of Sunni, Shi'ite and Kurdish parties overhow to share power. The Kurdistan Regional Government (KRG)rejects BP's deal as illegal, because it has not been consulted.
The project has, however, won crucial support from Kirkuk'sgovernor, Najimeldin Kareem, a Kurd.
"We will provide complete support for BP to develop Kirkukoilfield because it will generate a significant benefit for theprovince in relating to petrodollar revenues," Kareem toldreporters in Kirkuk.
Iraqi Oil Minister Abdul Kareem Luaibi and BP CEO Bob Dudleymet the Kirkuk governor to discuss the UK oil major's projectbefore heading to the ageing oilfield - where output has slumpedto around 280,000 barrels per day (bpd) from 900,000 bpd in2001.
AMBITIOUS PLANS
"BP has ambitious plans to boost production from the Kirkukoilfield to achieve big benefits for Iraq and the people ofKirkuk," Luaibi told reporters.
The company would work on the Baghdad-administered side ofthe border on the Baba and Avana geological formations. Kirkuk'sthird formation, Khurmala, is controlled by the KRG and beingdeveloped by the Iraqi Kurdish KAR group.
The agreement allows the British company - which alreadyoperates Iraq's biggest oilfield, Rumaila - to boost itsexposure in the world's fifth biggest holder of oil reserves.
After touring the oilfield, Dudley visited Baghdad and metPrime Minister Nuri al-Maliki and Deputy Prime Minister forEnergy Hussain al-Shahristani.
"In the four years we have worked with our partners atRumaila, we have stemmed the rapid decline in its production andraised output to more than 1.4 million barrels a day," Dudleysaid in a statement.
"... (We) are intent on bringing this experience to Kirkukto further deepen our commitment to Iraq to help manage two ofthe world's most significant oilfields."
Baghdad hopes BP will eventually sign a technical servicecontract at Kirkuk like the one for Rumaila, an Iraqi oil sourcesaid. The company expects, however, to negotiate bettercommercial terms for this contract, industry sources said.
At the start, BP will spend up to $100 million to help stopKirkuk's decline and carry out surveys to get a clear picture ofthe field. Iraqi officials have said they would like BP to raiseproduction capacity to around 600,000 bpd in five years.
Iraq's central government and the KRG are locked in awidening dispute over control of oil exports, oilfields andterritory that is fraying the country's uneasy federal union.
Baghdad insists it has the sole authority to sign deals andexport oil, but Kurdistan says the constitution allows it toagree to contracts and ship oil independently of Baghdad.
Exxon Mobil, Chevron and Total have infuriated the central government by signing lucrativeproduction sharing agreements with the KRG. BP has no interestin pursuing upstream opportunities in Kurdistan, industrysources said.
"Today's visit succeeded in securing the complete supportfrom the local government of Kirkuk and that's exactly what wasneeded for BP to start developing the Kirkuk oilfield," a senioroil official told Reuters.
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