Iraqi Minister Says State Oil Company May Buy Exxon’s West Qurna-1 Stake

Iraq’s oil minister Ihsan Abdul Jabbar said the country’s state-owned Basra Oil Co. is the likely candidate to buy ExxonMobil’s operator stake in the giant West Qurna-1 oil field.

The Basra Oil Co. oversees oil production in southern Iraq including West Qurna and Majnoon.
Source: Basra Oil Co.

Iraq’s state-owned Basra Oil Co. (BOC) may end up buying ExxonMobil’s operator stake in the giant West Qurna-1 oil field, after Chevron declined the offer and Iraq briefly considered options that included purchases by its Chinese partners.

Oil Minister Ihsan Abdul Jabbar told a news conference on 3 May that his ministry is discussing BOC “taking ownership of the Exxon stake in West Qurna-1 and leading the project, as happened with Majnoon,” Reuters reported.

Like West Qurna-1, Majnoon is in southern Iraq near the Iranian border and is considered one of the world’s largest untapped oil reserves. BOC took over the field when Shell and Petronas exited in 2017 citing declining profitability as oil prices fell.

As part of a global debt-reduction strategy, ExxonMobil had submitted a request in January to sell its 32.7% stake in the West Qurna-1 field.

Iraq at the time said it preferred to find another US company to buy the share; but when Chevron turned down the offer, the oil ministry announced in April it had widened its search to include possible Chinese buyers, or it might just purchase the stake itself through a state-owned company such as BOC.

West Qurna-1 was not the only topic, though, on Abdul Jabbar’s news conference agenda this week.

The minister said he expects development of Iraq’s Mansuriya gas field, which is also near to the Iranian border but northeast of Baghdad, to cost $2.1 billion. China’s Sinopec won a deal in April to develop Mansuriya together with Iraq’s state-run Midland Oil Company.

Abdul Jabbar said talks with some foreign companies to develop Iraq’s western Akkas gas field near the borders with Syria “are moving very slowly,” without elaborating.

Iraqi oil officials close to the talks have identified France’s Total and Chevron Corp. as foreign companies that have expressed an interest in Akkas, Reuters reported.

As a part of its drive to boost gas production, Iraq plans to invest $3 billion in Basra Gas Co. over the next 5 years to increase its production capacity by 40% to 1.4 Bcf/D, Abdul Jabbar told reporters

Basra Gas Co is a joint venture between state-owned South Gas Company, Shell, and Mitsubishi .

On another note, the minister added that he does not expect oil prices to drop below $65 a barrel and that lower oil prices should not be a concern after OPEC+ eases production cuts from May.