Oil and gas production giant BP has been in communication with Iraq's Ministry of Oil regarding the possibility of it potentially providing assistance in the country.

In a statement, Michael Townshend, the President of BP Iraq, said: "We have made a proposal for short-term assistance which the Ministry appears to like. We are progressing on that and it is early days".

The company declined to comment further on the nature of the proposal although a Dow Jones news report cited a senior Iraqi oil official suggesting that Iraq was considering a multi-billion dollar deal with BP to double the output from the country's giant Kirkuk oil field in northern Iraq.

Abdul Mahdy al-Ameedi, head of the Iraq oil ministry's petroleum contracts and licensing directorate, indicated that a request had been sent to the cabinet to approve contract negotiations with BP on developing the Kirkuk oil field which is reportedly suffering from massive output declines.

BP currently operates in southern Iraq, where it is developing the Rumaila oil field.

Ameedi was quoted as saying: "70% of provisions of the (possible) contract with BP to develop Kirkuk are ready".

ShareCast attempted to make contact with the Iraq Oil ministry but was unable to reach anyone for comment.

BP's share price was down 0.36% to 456.75p at 10:21 on Thursday morning.

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