Iraq has invited US energy firms to operate West Qurna-2, signaling a strategic shift in the country’s oil sector. Moreover, the move follows sanctions on Russia’s Lukoil, aiming to preserve production stability.
The Iraqi Oil Ministry said transferring operations to US energy firms would protect state revenue and support global market stability. In addition, officials emphasized continuity amid growing geopolitical tensions.
Lukoil holds a 75% stake in West Qurna-2 but declared force majeure on November 4. This occurred after US and UK sanctions over Russia’s war in Ukraine. Furthermore, a previous attempt to sell its stake to Gunvor failed after US Treasury blocked the deal.
West Qurna-2 contains 14 billion barrels of recoverable oil and produces about 10% of Iraq’s total output. Meanwhile, production continues at 460,000 to 480,000 barrels per day despite operational challenges.
The Iraqi government acted promptly to pay overdue wages in dinars to local staff. Consequently, this measure prevented delays and ensured stability at a facility generating over $50 billion in revenue since launch.
US energy firms are now evaluating potential acquisitions at West Qurna-2. For instance, ExxonMobil and Chevron are exploring Lukoil’s international assets. In addition, Exxon considers bids for Kazakhstan projects where it partners with Lukoil, while US private equity firm Carlyle expresses interest as well.
Currently, the Technical Services Contract caps remuneration at $1.15 per barrel. However, net profit drops to $0.19 per barrel after performance adjustments. Analysts note that improved commercial terms may be offered to incentivize Yamama formation development.
Exxon signed an agreement in October for Majnoon field development, which holds nearly 13 billion barrels. Therefore, the project represents a strategic opportunity to help Iraq achieve six million barrels per day by 2029.
Industry experts say awarding West Qurna-2 to US energy firms could attract foreign investment and reduce geopolitical risks. Moreover, officials expect bids to conclude by early 2026, with operations potentially transferring soon after.
Overall, Iraq aims to strengthen its oil sector while forging closer cooperation with US energy firms. Consequently, this initiative may reshape regional energy partnerships and boost long-term stability.
