Iraq may take over unwanted West Qurna stakes

Baghdad could take over stakes in oil fields operated by Lukoil and ExxonMobil, as some of Iraq's biggest foreign partners push to exit the country.

Iraq's oil ministry has so far vetoed a sale to other firms, but it could now be willing to take back unwanted stakes, oil minister Ihsan Ismael says, according to the state-run Iraqi News Agency. Lukoil confirmed in late July that it is in talks with Baghdad on reducing its 75pc operating stake in the 13bn bl West Qurna 2 field.

But the company is still working at its block 10 licence, where it will soon start early oil production of 30,000 b/d. Lukoil operates the block with a 60pc interest, with Japan's Inpex holding the remaining 40pc.

The oil ministry is also working on buying a stake in the 500,000 b/d West Qurna 1 field from ExxonMobil. The US major wanted to sell its 32.7pc interest, but Iraq blocked this, pushing ExxonMobil to seek arbitration with the International Chamber of Commerce. Iraq State Oil Exploration already has a 10pc stake in the field.

Other firms exiting Iraqi fields include BP, which plans to pull out of the 1.5mn b/d Rumaila project — Iraq's biggest producing field — which it operates with a 47.63pc stake. This trend began in 2016 when US firm Occidental sold its stake in the 4bn bl Zubair field. Iraq then took over Shell's operating stake in the Majnoon field in 2018. But the government still supports foreign investment, Ismael says.

And while these companies push to quit the country, Baghdad recently signed off on four major energy projects planned by TotalEnergies — the Common Seawater Supply Project, boosting crude production capacity at the Ratawi field, capturing associated gas and developing solar power plants.