A major investment in the heart of a major oil-producing region was the engine driving ConocoPhillips (COP +1.66%) stock higher on Friday. The sprawling upstream oil company's shares rose by almost 2% on the news, effortlessly topping the S&P 500 index's 1% decline.
A potential gusher
Before market open that morning, ConocoPhillips announced that it agreed with BP to acquire a 42% stake in the British energy giant's BP Energy Company of Kirkuk in Iraq. The deal gives the company a large piece of four oil fields located in Kirkuk, a region in northern Iraq.
Image source: Getty Images.
ConocoPhillips said that the agreement formalizing the deal is expected to be signed during Iraq Prime Minister Ali al-Zaidi's current visit to Washington, D.C.
In its press release on the arrangement, the company quoted CEO Ryan Lance as saying that "this unique redevelopment opportunity is well aligned with our disciplined investment framework, providing access to a material, high-quality and long-life resource base, comfortably meeting our cost of supply threshold."
NYSE: COP
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Black gold
ConocoPhillips is a pure-play upstream company, meaning that its focus is entirely on the exploration and extraction of oil. Given that, whenever it has the chance to participate fully or partially in a promising play, it's usually a win.
That goes double for Kirkuk, which is immense even by the standards of the oil-rich Middle East. While it remains to be seen how the ConocoPhillips/BP relationship within BP Energy of Kirkuk will unfold, this buy-in is almost certain to be beneficial to the American company's operations and financials.
