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BP is considering quitting upstream operations in Iraq, where the supermajor operates the biggest oilfield, Iraqi Oil Minister Ihsan Abdul Jabbar Ismaael said in a video posted on the oil ministry’s Facebook page and quoted by Reuters.
Another foreign oil company, Russia’s second-largest oil producer Lukoil, has informed Iraq that it wants to sell its majority interest in the West Qurna-2 oilfield to Chinese firms, the Iraqi minister added.
According to Ismaael, Iraq’s current investment climate is not suitable for keeping international oil majors in the country.
Talk of BP willing to reshuffle its holdings in OPEC’s second-largest producer Iraq is not new.
Last month, The Wall Street Journal reported that BP was considering spinning off its oil assets in Iraq, including its holding in the world’s third-largest oilfield. BP is reportedly working on the plan to create the new company together with China National Petroleum Corporation (CNPC), the owner of PetroChina, which is BP’s partner in the field alongside the Iraqi state-owned Basra Oil Company (BOC), sources with knowledge of the plan told the Journal.
If BP spins off its Iraqi operations, this will be highly symbolic of the course the UK major wants to take in the energy transition, considering that the energy giant has been working and investing in Iraq for nearly 100 years.
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BP’s presence in Iraq began in Kirkuk in the 1920s when the company that is now known as BP helped Iraq to locate, produce, and export oil from Baba Gurgur, which was the largest oil field in the world at the time.
Rumaila, the third-largest producing field in the world, is estimated to have around 17 billion barrels of recoverable oil remaining, according to BP. With BP as an operator, the Rumaila oilfield produces 1.5 million barrels per day (bpd) of oil, or around a third of the crude oil pumped in OPEC’s second-largest producer after Saudi Arabia.
Lukoil, for its part, holds 75 percent in West Qurna-2, while Iraqi state owned North Oil Company (NOC) owns the other 25 percent. Before the pandemic upended production and investment plans of all oil majors, Lukoil was planning to raise production at the field to 480,000 bpd last year from 400,000 bpd.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.