Iraq in talks to take over Exxon's stake in West Qurna 1 oil field: minister

Dubai — Iraq is in talks with ExxonMobil to take over its 32.7% stake in West Qurna 1, the country's oil minister said May 3, as the US major seeks to exit one of the world's largest oil fields with its expected recoverable reserves of over 20 billion barrels.

Ihsan Ismaael disclosed the talks in a press conference in Baghdad broadcast by Qatari news channel Al Jazeera on May 3.

As a matter of practice, ExxonMobil does not comment on commercial discussions, a spokeswoman said.

The minister had previously said Iraq was in talks with potential unnamed US energy companies to take over ExxonMobil's stake. Other partners in West Qurna 1, where ExxonMobil is the main operator, are PetroChina (32.7%), Japan's Itochu (19.6%), Indonesia's Pertamina (10%) and Iraq's Oil Exploration Co. (5%).

Earlier departure by Shell

Iraq awarded the contract to develop West Qurna 1 to ExxonMobil, Shell and Oil Exploration Co. in 2010. In 2018, Shell sold its 19.6% stake to Itochu and exited the giant Majnoon oil field.

ExxonMobil's exit from the southern West Qurna 1 field may be similar to Shell's 2018 divestment of its stake in Majnoon, whose operations are now managed by state-owned Basrah Oil Co., the minister said at the press conference.

In February, Oslo-based DNO bought ExxonMobil's 32% stake in the Baeshiqa license in Iraq's Kurdistan region, part of a plan by the Norwegian company to boost spending in the semiautonomous area and speed up production from existing wells in 2021.

Deals with other US companies

As some Western oil majors exit Iraq, others have made headway. Iraq signed $8 billion worth of deals with five US energy sector companies last August during Prime Minister Mustafa al-Kadhimi's first state visit to the US. The deals included an upstream pact with Chevron and power agreements with GE. Other companies involved were Baker Hughes, Honeywell and Stellar Energy.

Meanwhile, BP operates the giant Rumaila field, which can produce around 1.5 million b/d out of Iraq's estimated 5 million b/d capacity. Italy's Eni runs the Zubair field, while Russia's Lukoil operates West Qurna 2.

ExxonMobil unveiled plans in February to sell most of its UK North Sea operations as part of a road map to divest $15 billion in assets by 2021 and $25 billion by 2025.