ExxonMobil looks to exit West Qurna

Iraqi officials claim ExxonMobil has told the government it wants to sell its share in the West Qurna-1 oilfield, the first official confirmation the US giant is looking to pull out of the project in southern Iraq.

ExxonMobil’s decision to quit the $50 billion project will exacerbate tensions between Baghdad and the autonomous Iraqi Kurdistan, where the US supermajor signed oil deals seen as more lucrative but dismissed by the central government as illegal.

“ExxonMobil sent a letter to the South Oil Company expressing its wish to sell its stake in West Qurna 1 oilfield,” Reuters quoted director of Iraq’s contracts directorate, Abdul-Mahdy Ameedi, telling reporters on Wednesday.

The news agency quoted another Iraqi official as saying the government would reply by Sunday.

It is still unclear who could replace ExxonMobil in the huge oilfield which pumps about 400,000 barrels per day of crude, however Anglo-Dutch supermajor Shell holds a minority stake in the field.

In a separate decision, Iraq asked Kuwait Energy to acquire shares of Turkey’s state-owned TPAO in its exploration Block 9 oilfield after Iraq’s cabinet decided to expel the Turkish company from the project, Reuters reported.

The measure will mean Kuwait Energy will hold 70% and Dragon Oil 30% in the project. TPAO currently holds a 30% interest in the block.

“The cabinet rejected the approval of Turkey’s TPAO as a partner,” Ameedi was quoted as saying. “

The government decision will not affect TPAO’s other activities in Iraq. The expulsion is only for this oil contract.”

According to Reuters, he refused to give any reason for the decision, but the expulsion comes at a time of tensions between Baghdad and Ankara after Turkey accused Iraqi Prime Minister Nuri Maliki of sidelining Sunni Muslims in Iraq’s political crisis.

Requests by Upstream for comment from an ExxonMobil spokesperson in the UK were referred to the company’s Houston office.

Source: Upstream Online


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