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BP, Lukoil want to quit Iraqi oil projects due to investment environment: minister


BP is lead contractor in Rumaila, country's biggest field

Lukoil wants to sell its stake in West Qurna 2 to Chinese companies

ExxonMobil seeking to leave Iraq

BP and Lukoil want to quit their Iraqi energy projects due to the current investment environment, the country's oil minister said, as OPEC's second biggest producer faces an exodus of international oil companies that want o exit unattractive contracts.

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Lukoil wants to sell its stake in West Qurna 2 to Chinese companies, Ihsan Ismaael said in a video posted online.

"The investment environment in Iraq is not appropriate to maintain major investors," Ismaael said in the video addressing some members of parliament. "All major investors either are looking for another market or looking for another partner."

Officials from BP, Lukoil and the Iraqi oil ministry weren't immediately available for comment.

BP and Lukoil would join ExxonMobil, which is seeking to sell its stake in the southern oil field of West Qurna 1.

BP's Rumaila

BP is lead contractor of the Rumaila oil field, where it has a 38% stake alongside CNPC's 37% holding and the rest is shared between state-owned Basrah Oil Co. and the State Oil Marketing Organization, its partners in a technical service contract that expires in 2034.

The southern field of Rumaila is the country's biggest with a production capacity of about 1.5 million b/d out of the country's 5 million b/d production capacity and estimated 17 billion barrels of recoverable oil remaining.

Lukoil has a 75% stake in the southern mega field West Qurna 2 with state-owned North Oil Co holding the remainder.

Iraq is considering buying Exxon's 32.7% stake in West Qurna 1, Ismaael said May 3, as the US major seeks to exit one of the world's largest oil fields with expected recoverable reserves of over 20 billion barrels.

Shell's exit

Ismaael had previously said Iraq was in talks with potential unnamed US energy companies to take over Exxon's stake. Other partners in West Qurna 1 are PetroChina (32.7%), Japan's ITOCHU Corp. (19.6%), Indonesia's Pertamina (10%), and Iraq's Oil Exploration Co. (5%).

International oil companies in Iraq operate some of the country's biggest fields in return for a per barrel fee linked to production.

The terms of the contracts have been a point of contention over the years, although Iraq needs international expertise to run these fields.

Exxon's exit from the southern West Qurna 1 field may be similar to Shell's 2018 divestment of its stake in Majnoon, where operations are now managed by Basrah Oil Co., the minister said May 3.