To add details and background

July 17 (Reuters) - ConocoPhillips said on Friday it had agreed to acquire a 42 percent stake in BP Energy Ltd in Kirkuk from BP, joining the British oil giant in redeveloping four oil fields in the northern Iraqi region.

The agreement is expected to be signed during Iraqi Prime Minister Ali al-Zaidi's official visit to Washington, where he seeks to increase American investment in Iraq's oil, gas and energy sectors following the turmoil caused by the conflict with Iran.

The contract includes the development of recoverable resources exceeding three billion barrels of oil equivalent, with additional exploration potential in the Baba and Avana domes in the Kirkuk oil field, and the Bai Hassan, Jambur and Khabbaz fields.

The deal comes as part of BP's restructuring of its investment portfolio under the leadership of Chief Executive Meg O'Neill, who took over in April after a long career at ExxonMobil.

O’Neill pledged to streamline the company’s operations, enhance capital management, and direct investment towards higher-yielding oil and gas assets, while recycling capital through selective partnerships and the sale of some assets.

For Iraq, this is another step to attract more American investment into a sector where Chinese companies have increasingly dominated over the past few years.

The cabinet, led by al-Zaydi, recently approved an agreement with the US company HKN Energy to develop the Hamrin oil field in northern Iraq, and also approved a cooperation agreement with General Electric to expand the country's power generation and transmission.

The Kirkuk field, discovered almost a century ago, is one of the oldest producing oil fields in Iraq, and still contains large reserves, making it pivotal to Baghdad's plans to maintain crude oil production over the coming decades.

BP said the deal would not affect the terms of the contract or the operating roles of Iraq's North Oil Company and North Gas Company, or a planned handover of operations management to an entity made up mostly of their employees.

The two companies indicated that the joint venture does not require significant capital contributions.

The deal is expected to be completed by the end of 2026.