Chevron and Iraq agree on exclusive talks about West Qurna 2.

Chevron is in exclusive talks with Iraq about the West Qurna 2 giant oilfield. This brings them closer to purchasing the field from the sanctioned Russian oil company Lukoil.

Chevron has said that the talks will include an exchange of confidential information. This could allow the U.S. major oil company to expand its footprint in Iraq after the country nationalised the West Qurna 2 project and dismantled Lukoil’s interest.

Iraq nationalised its field in the last month, after the U.S. imposed Lukoil sanctions to put pressure on Russia to end the war in Ukraine.

Exclusive Negotiation Rights for One Year

The office of Iraqi Prime Minister Mohammed Shia al-Sudani confirmed that Chevron had signed a deal with the Basra Oil Company.

Al-Sudani’s office released a statement stating that the agreement between BOC and?Lukoil allows for the?temporary transfer of the West Qurna 2 Contract to BOC. BOC will then assign it to Chevron once the terms of the contract have been agreed.

Al-Sudani’s office announced that Chevron would have exclusive rights to negotiate for a period of one year.

Chevron stated that the Iraqi Council of Ministers will have to approve the agreements. Certain steps depend on other approvals, including those from the U.S. Office of Foreign Assets Control.

Chevron said that competitive economic terms are essential for upcoming negotiations.

LUKOIL AND AN "AMICABLE SETTLEMENT"

Last week, the Iraqi Cabinet approved a "compromise" with Lukoil regarding?the transfer to BOC of the oilfield's operations. Lukoil must sell its assets by February 28, according to the sanctions.

West Qurna is one of the world's largest oilfields and accounts for nearly 10% of Iraqi production.

The deal between Chevron and West Qurna 2 will be a major step forward for the U.S. Oil Major in?Iraq.

Since completing the deal to buy U.S. oil company Hess in 2025 for $53 billion, it has agreed to develop a number of fields?in this country as part an international expansion. Reporting by Stephanie Kelly and Ahmed Rasheed, Editing by Louise Heavens & Jan Harvey

(source: Reuters)