Exxon Mobil Corp has decided to sell its stake in the giant West Qurna 1 oilfield to the Iraqi National Oil Company in a deal approved by the Iraqi government, Iraq’s Oil Minister Ihsan Abdul Jabbar Ismaael said on Wednesday without disclosing financial details of the deal.
With a production capacity of close to 500,000 bpd in 2021, southern Iraq’s West Qurna 1 is among the world’s largest oilfields. According to Iraqi officials, its recoverable reserves have been estimated at more than 20 billion barrels.
West Qurna 1’s other foreign shareholders in are Petrochina (32.7%) Japan’s Itochu Corp (19.6%) and Indonesian Pertamina (10%) while the remaining 5% are in the hands of Iraq state-run Oil Exploration Company.
Exxon was seeking to sell its 32.7% stake in the oilfield for $350 million earlier last year, according to Khalid Hamza, director of the state-run Basra Oil Company.
Also last year, S&P Global Platts reported that the US company has filed an arbitration case against Basra Oil Company over its stalled effort to sell its stake in West Qurna 1.
In January 2021, Exxon made an agreement with third parties to sell its 32.7% share, but Iraq’s oil minister Ismaael has blocked it in May saying that Iraq itself wants to take over the stake.
As Iraq curbs output to support prices along with other top producers and as a result of tension between the US and Iran, which has close ties to Iraqi Shi’ite militias, foreign interest in developing southern Iraq’s oilfields has decreased significantly.
However, Exxon claims the selling of its stake in West Qurna 1is part of the company’s strategy to focus on more cost-efficient assets – particularly in the Americas – despite the fact that only two years before, in 2019, it was poised to move ahead with a $53 billion project to boost Iraq’s oil output.
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