Bloomberg News

Lukoil Considers Iraq’s West Qurna-1 This Year as Exxon May Exit

November 28, 2012

OAO Lukoil, Russian’s biggest non- state oil producer, is studying documents on Iraq’s West Qurna-1 oil field, which Exxon Mobil Corp. (XOM:US) may exit, as it considers expanding developments in the Middle Eastern nation.

Lukoil will make a decision on possible participation in the project by the end of the year, billionaire Chief Executive Officer Vagit Alekperov said. The oil company holds 75 percent of the separate phase 2 project at the field, called a “super giant” by the Iraqi Oil Ministry.

“We are looking at the main issue now, synergy,” Alekperov told reporters today in Moscow. “What economic synergies the company will get if these two projects work together.”

Iraq is seeking international investment in its energy industry, while warning companies against signing agreements with authorities in the northern Kurdish region without the approval of the central government. The nation this year asked companies such as Exxon Mobil to abandon oil exploration in the semi-autonomous area or exit projects in the south.

Exxon sent a letter to Iraq’s state-owned South Oil asking for permission to share technical data about West Qurna-1 with BP Plc (BP/), Eni SpA (ENI) and Lukoil, Dhia Jaafar, South Oil’s director general, said Nov. 8. Lukoil said Nov. 9 that it received a proposal from Exxon.

Lukoil’s Qurna

Exxon has 60 percent of the West Qurna-1 project after signing an agreement in January 2010 to develop the field, according to the Irving, Texas-based company’s website. Oil Exploration Co. of Iraq holds 25 percent and Royal Dutch Shell Plc (RDSA) has the remaining 15 percent, according to the statement.

Iraq informed Lukoil and China National Petroleum Corp. it would favor their bids if they decided to buy Exxon’s stake in the project, Reuters reported on Nov. 16, citing unidentified oil ministry officials.

Lukoil raised its stake in West Qurna-2 to 75 percent this year after buying about 19 percent from Statoil ASA. (STL) The Moscow- based oil producer is searching for a new partner in the project, Deputy Vice-President Andrei Gaidamaka said on a conference call yesterday.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


Ebola Rising
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • XOM
    (Exxon Mobil Corp)
    • $92.86 USD
    • -1.19
    • -1.28%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus