Iraq nationalises West Qurna 2 Oilfield Operations, Government Says
Iraqi Cabinet has approved the nationalisation of petroleum operations in West Qurna 2 Oilfield, one?of the world's largest oilfields, according to the 'provisions' of a contract signed with Russia Lukoil.
The cabinet agreed to also seek approvals for financing operations via the Majnoon account. This will be boosted with proceeds from crude shipments sold by SOMO, state oil marketing company.
An Iraqi oil manager said that the state-run Basra Oil Company would?cover local salaries, operational costs, and payments made to subcontractors using a?account linked to the Majnoon field to facilitate the process.
The official stated that production at West Qurna 2 is'steady' at between 465,000 and 480 000 barrels per day.
An official from the Oil Ministry with knowledge of West Qurna 2 operations said that Iraq decided to take control of operations in order to avoid production disruptions due to sanctions against Russia's Lukoil. Lukoil declared "force majeure" in November at West Qurna 2 after being hit with sanctions along with Rosneft in the U.S. President Donald Trump’s effort to end the conflict in Ukraine.
Sources have reported that the?sanctions? have attracted bids from a dozen investors including U.S. oil giants Exxon Mobil and?Chevron as well as private equity firm Carlyle.
Lukoil’s biggest foreign asset was its?75% stake in Iraq’s West Qurna 2 Oilfield.
The?field is responsible for 0.5% of the global oil supply, and 9% of Iraq's total production. Iraq is OPEC’s second largest producer after Saudi Arabia.
(source: Reuters)
