Chevron looks set for its long-sought-after entry into federal Iraq's upstream sector, having signed a preliminary agreement with the Baghdad government to develop four oil and gas exploration blocks in Nasiriya, in the southern Dhi Qar province, and the Balad oil field, among others.
The agreement was signed on Tuesday, 19 August, after a meeting between Iraq's prime minister Mohammed Shia al-Sudani and Chevron's vice president Frank Mount in the Iraqi capital.
"The prime minister welcomed Chevron's renewed engagement in Iraq," al-Sudani's office said in a statement on social media platform X.
This is Chevron's second attempt in recent years to enter the Nasiriya project, after engaging in several rounds of discussions with the federal government in 2020 and 2021. The oil ministry at the time said it intended to boost production capacity in Dhi Qar province by as much as three times, to 600,000 b/d, within seven years.
These talks ultimately faltered, with the sides unable to agree terms.
The prime minister on Tuesday "affirmed that the government has adopted a new approach in dealing with major international oil companies, and their investments in Iraq, especially American ones."
Should this latest agreement progress into a binding contract, it would represent Chevron's long-hoped-for entry to federal Iraq's upstream. It was previously involved upstream in Iraq's northern semi-autonomous Kurdistan region. There Chevron acquired stakes in the Sarta, Rovi and Qara Dagh blocks in the early 2010s, but gradually withdrew. It relinquished its stake in Rovi in 2015, then in Sarta in 2023 due to underperforming wells. Its license for Qara Dagh expired in 2023.
Iraq "is a country full of opportunities and high potential," Mount said on Tuesday. "[Chevron] is proceeding with a long-term partnership with Iraq, which is witnessing security and stability."
