Latest News

Iraq and Exxon Sign Agreement to Help Develop Oilfield

Exxon Mobil returned to Iraq two years after it left, signing an agreement on Wednesday with Iraq to develop the large Majnoon Oilfield and expand their oil export infrastructure.

OPEC’s second-largest producer wants to attract Western oil majors back and increase production, which has been constrained for years by wars, corruption and religious tensions.

Iraqi Prime Minister Mohammed Shia al-Sudani said that Exxon had signed a deal, but provided few details.

According to four sources familiar with the situation, the agreement will include a profit sharing agreement for crude oil and refined oil products as well as plans to upgrade the Iraqi oil exporting infrastructure in the South.

Sources claim that Iraq's state-owned oil company SOMO, will also sign a contract with Exxon in order to secure storage space on the Asian market.

SOMO and Exxon didn't immediately respond to comments.

Iraqi state-run news agency INA reported that in September, SOMO had advanced discussions with Exxon about a potential agreement to secure Singapore storage capacity using tanks owned and operated by the U.S. major oil company.

Iraq signed deals with major oil companies that left the country in the last two years. These include Chevron, France’s TotalEnergies, and the UK’s BP.

Exxon was the first Western oil company to enter Iraq and develop oilfields after the U.S. invasion of 2003. It left the West Qurna Project due to what some sources describe as poor returns.

The company also attempted to develop fields in Iraq’s semi-autonomous Kurdistan region despite Baghdad’s anger, but abandoned those projects because of what sources claimed were poor exploration results.

Exxon sold its remaining interest in the West Qurna 1 Oilfield to PetroChina, who became the main contractor.

Iraq's federal Government reached an agreement in September with the Kurdistan Regional Government and international oil companies, to resume crude exports via Turkey that had been suspended since 2023.

This is expected to return up to 230,000 bpd to the international market at a moment when OPEC+ countries are increasing output to gain a greater share of the market. Reporting by Aref Mohammad in Basra, and Ahmed Rasheed from Baghdad. Additional reporting by Stephanie Kelly at London. Writing by Ahmed Elimam. Editing by Elaine Hardcastle and Emelia Sithole Matarise. Jason Neely.

(source: Reuters)