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The Iraqi Ministry of Oil confirmed on Saturday the finalization of a settlement agreement with ExxonMobil, paving the way for the American energy giant’s departure from the West Qurna 1 oil field. Simultaneously, the ministry announced that Chinese company PetroChina would assume the field’s leading operator role.
Hassan Muhammad, deputy Basra Oil Co. manager in charge of oilfields and licensing rounds affairs, revealed that the settlement agreement underwent scrutiny by the Ministry of Oil and the Basra Oil Company. It was determined that PetroChina would become the primary operator of the West Qurna 1 field. As a result, the Chinese company will now hold the largest share in the field after ExxonMobil’s departure.
ExxonMobil, which previously owned a 22.7% stake in the West Qurna 1 oil field with a capacity of 550,000 barrels per day, has now concluded a “sale agreement” to transfer its share to the state-run Basra Oil Company.
The sale agreement encompasses financial matters, and a commitment has been made to address the tax issue associated with ExxonMobil’s share in additional negotiations.
Regarding the unresolved tax matter, the Iraqi official stated that two options are under consideration: reaching a settlement agreement on the tax or resorting to arbitration.
Notably, the preceding year, the state-owned oil and gas firm Pertamina acquired 10% of ExxonMobil’s share in the West Qurna 1 oil field, increasing its stake to 20%. Concurrently, the Basra Oil Company purchased 22.7% of the field’s share.
According to officials from the Basra Oil Company, with ExxonMobil’s exit from West Qurna 1, the company will no longer have a presence in the Iraqi energy sector.
