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Iraq May Buy Exxon’s Stake In Major Iraqi Oilfield

Iraq could buy ExxonMobil’s 32.7-percent stake in one of the largest oilfields in OPEC’s second-largest producer, West Qurna 1, Bloomberg quoted Iraq’s oil minister Ihsan Abdul Jabbar Ismaael as saying on Monday.

Reports of the U.S. supermajor potentially divesting its stake in the large Iraqi oilfield are not new. Last year, Bloomberg reported that Chinese state giants China National Petroleum Corporation (CNPC) and China National Offshore Oil Corporation (CNOOC) were interested in buying ExxonMobil’s entire operating stake in West Qurna 1. The stake sale could be worth at least US$500 million, reports had it at the time.

Last month, Bloomberg reported that Exxon was considering selling its stake in West Qurna 1 as it looks to cut its debts, which grew in 2020 with the collapse in oil prices, while the supermajor looks to keep its dividend intact.

The Iraqi government could now end up buying Exxon’s interest, the oil minister of OPEC’s second-largest producer behind Saudi Arabia said on Monday. A potential acquisition would be made via the Iraqi state-held Basra Oil Company, the minister added.  

ExxonMobil signed in 2010 an agreement with the South Oil Company of the Iraq Ministry of Oil to rehabilitate and redevelop the West Qurna I field in southern Iraq. Exxon is the lead contractor, while a Royal Dutch Shell affiliate also held a stake under the 2010 agreement.

In 2018, Shell sold its stake in West Qurna 1 to Japan’s Itochu Corporation. The Japanese firm currently holds 19.6 percent in the oilfield. Apart from Itochu and the lead contractor Exxon, the other shareholders in West Qurna 1 are PetroChina with 32.7 percent, Indonesia’s Pertamina with 10 percent, and Oil Exploration Company with 5 percent.

Speaking to reporters today, the oil minister also said that Iraq sees oil prices staying around $65 per barrel in the near term.

By Charles Kennedy for Oilprice.com

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