The Iraqi cabinet has decided to invite Russia’s Gazprom to develop the Nasiriyah oil field in the southern part of the country, according to a post on the Iraqi prime minister’s official Telegram and Facebook channels.
The decision by the Council of Ministers tasks Iraq’s Oil Ministry to prepare a contract granting Russian state-owned Gazprom exclusive rights to develop Nasiriyah, Russia’s Interfax news agency reported in early February, citing the prime minister’s social media posts.
Gazprom's oil subsidiary, Gazprom Neft, is already active in Iraq with a 30% operator stake in the Badra project in the Wasit region in eastern Iraq. Its partners include Korean Gas Corporation (KOGAS), 22.5%; Malaysia’s Petronas, 15%; and Turkey’s TPAO, 7.5%. The Iraqi government, represented by Oil Exploration Company, holds a 25% stake.
Gazprom owns more than 95% of shares in Gazprom Neft which is developing Badra with its estimated 3 billion bbl in reserves under a 20-year contract agreed in 2010 with an option for a 5-year extension. Commercial oil shipments began in August 2014, according to Russia’s TASS news agency and Kommersant business daily.
Through its subsidiary Gazprom Neft Middle East, the company also participates in oil and gas projects in Iraqi Kurdistan including Shakal (80% share) and Garmian (40%).
As for the Nasiriyah field, TASS quoted Iraqi Prime Minister Mohammed Shia Sabbar al-Sudani as saying: “In a one-off measure, a resolution was approved to involve Gazprom in the development of the Nasiriyah field. This measure is taken as an exception to Article 3 paragraph 6 of the instruction for the implementation of state contracts adopted in 2014.”
Shia Sabbar clarified that in negotiations with Gazprom, the Iraqi Oil Ministry is responsible for agreeing contract terms.
Gazprom Takes Over After Lukoil Deal Stalls
In 2021, Iraq announced that Russia’s largest independent oil major, Lukoil, would invest through its Litasco trading company to double Nasiriyah’s production capacity to 200,000 B/D, as well as construct a 100,000 B/D oil refinery.
At the time, Lukoil President Vagit Alekperov said that his company would not be involved in financing Nasiriyah, but would organize transportation of oil from the field, according to Reuters.
Lukoil’s main asset in Iraq remains the West Qurna-2 field. It also holds a 60% operating interest in Block 10 where the recently discovered Eridu field is located, and since March 2023, has been added to Lukoil’s Iraqi portfolio.
Lukoil holds a 60% operator interest in Block 10 in partnership with Japan’s INPEX Corporation holding a 40% participating share. Block 10 is located in the Di-Kar and Mutanna provinces, 120 km west of Basra, near major fields such as Rumaila and West Qurna, according to Lukoil’s website.
West Qurna-2’s 14 billion bbl of initial recoverable reserves are being developed under a 25-year service contract signed in January 2010 under which Lukoil receives a fixed payment per barrel produced after costs are compensated, according to Kommersant, which reported that Lukoil had offered a similar scheme to Iraqi authorities for Nasiriyah.
In May 2018, the Russian company agreed on further development of West Qurna-2 with production targeted to increase to 800,000 B/D in 2025.
