ExxonMobil to Sell Iraq's West Qurna-1 Stake

Source: The Wall Street Journal 11/7/2012, Location: Middle East

U.S. energy giant Exxon Mobil Corp (XOM) has begun talks with other international oil companies to sell its stake in Iraq's West Qurna-1 oilfield in southern Iraq, a senior Iraqi oil official said.

"There is a letter from Exxon to South Oil Co. in which it said that it has started discussions with some parties, companies to sell its stake in West Qurna-1," Abdul Mahdy al-Ameedi told reporters in Baghdad.

Exxon needs to sell its stake to one of the companies that were previously pre-qualified by the oil ministry to acquire Iraqi oil and gas projects, Mr. al-Ameedi told reporters in Baghdad.

Iraq has qualified some 46 companies to take part in its licensing auctions, including Royal Dutch Shell PLC (RDSA), BP PLC (BP), Eni SpA (E), OAO Lukoil Holdings (LKOH.RS), Occidental Corp. (OXY) and China National Petroleum Corp., or CNPC.

Mr. al-Ameedi, however, didn't say which companies Exxon Mobil is talking to in order to sell its stake.

The Texas-based company signed an agreement with the Kurdish Regional Government in 2011 to explore for oil there, in defiance of Baghdad, which says only the central government has the right to grant such licenses. The central government has previously said Exxon Mobil must choose whether it wants to continue operating in southern Iraq, or move to Kurdistan, but that it can't do both.

After promising to freeze its operations in Kurdistan over the summer, the Wall Street Journal reported last month that Exxon Mobil is planning to start exploratory drilling there in early 2013.

At West Qurna-1, Exxon and minority partner Shell have raised output to nearly 400,000 barrels a day from 244,000 barrels a day when the pair signed up for the project in early 2010. The contract targets eventual output of 2.825 million barrels a day.

The venture will get some $1.90 for each extra barrel of oil produced above the 244,000 barrels a day base-line.


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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