Iraq may take over unwanted West Qurna stakes

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

The Russian oil firm confirmed in late-July it was holding talks with Baghdad to reduce its 75pc operating stake in the 13bn bl West Qurna 2 field. The oil ministry has so far vetoed a sale to potential investors, but is now saying it could be willing to take back the unwanted stake.

"Discussions with the company during the last six months contributed to the company's official retraction of its desire to offer part of its share...for sale to other companies," Ismael said yesterday, according to state-run Iraq News Agency.

But while Lukoil plans to reduce its stake at West Qurna 2, it is still working at its block 10 license where it will soon start early oil production of 30,000 b/d. Lukoil operates the block with a 60pc share, with Japan's Inpex holding the remaining 40pc.

The oil ministry is also working on buying shares in the West Qurna-1 field from ExxonMobil. The US major had planned to sell its 32.7pc stake in the 500,000 b/d West Qurna-1 oil field, but Iraq has blocked the sale, pushing ExxonMobil to file an arbitration case with the International Chamber of Commerce. State-owned Iraq state Oil Exploration already has a 10pc in the field.

BP also plans to pull out of the 1.5mn b/d Rumaila project — Iraq's single biggest producing field — which it operates with a 47.63pc holding.

This trend began in 2016 when US independent Occidental sold its stake in the 4bn bl Zubair field. Baghdad then took over Shell's operating stake in the Majnoon field in 2018.

But the government and the ministry still support maintaining foreign investment, Ismael said.

And while other oil companies push to quit, Iraq's government recently signed off on four major energy projects planned by TotalEnergies. These include the common seawater supply project (CSSP), boosting crude production capacity at the Ratawi field, capturing associated gas and solar power plants.

By Adal Mirza