The pending sale of Statoil’s stake in the supergiant West Qurna 2 oilfield in Iraq to Russian operator Lukoil is set to be completed in May, with the Norwegian state oil company waiting only on a written confirmation from the Baghdad authorities, according to reports.

“Everything is ready and both companies agreed on the price of the stake, but Statoil is waiting for a letter from Iraq,” an Iraqi industry source  told Dow Jones.

Statoil was earlier reported to have reached an agreement with Lukoil to transfer its 18.75% stake in the project, which it has hinted does not conform to its profitability criteria and does not represent a core investment for the company. Both companies have confirmed the deal.

The transaction would leave the Russian oil giant with a dominant 75% interest in West Qurna 2, with state-owned North Oil Company on 25%.

Lukoil chief executive Vagit Alekperov was quoted as saying by Russian news agency Interfax that the company plans to close the deal in May.

“At this stage we will buy Statoil’s entire stake but if we get a good offer we have the right to sell some of the stake,” he said.

The two companies were awarded a 20-year service contract for the second phase of the West Qurna field development in 2009, with first oil originally planned for August 2012.

However, the field is now not expected to come online before late next year as bureaucratic hurdles, including delays in approving contractors, have stalled progress on the project.

Statoil’s exit may also have been triggered by recent increased unrest in Iraq the after the pull-out of US troops at the turn of the year, with chief executive Helge Lund recently reported as saying the company  had experienced some “demanding” years in the war-ravaged Middle East country.

Source: Upstream Online