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Iraqi government looking at buying Exxon out of oilfield stake

West Qurna-1 field has recoverable reserves of more than 20 billion barrels

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Oil: An Iraqi refinery near Baghdad. Photor: Shawn Baldwin/Bloomberg

Oil: An Iraqi refinery near Baghdad. Photor: Shawn Baldwin/Bloomberg

Oil: An Iraqi refinery near Baghdad. Photor: Shawn Baldwin/Bloomberg

Iraq, Opec's second-biggest oil producer, said crude prices would probably remain around $65 a barrel in the coming months and announced it's considering buying Exxon Mobil's stake in one of the world's biggest fields.

The Organization of Petroleum Exporting Countries and its allies – a 23-nation grouping known as Opec+ – will continue trying to keep crude prices "within normal averages", Oil Minister Ihsan Abdul Jabbar told reporters in Baghdad. "There is no concern about a drop in prices."

The comments suggest Opec+ remains confident about the outlook for energy demand, despite the surge in coronavirus cases in India, the third-largest oil importer.

The group of major exporters began unprecedented supply cuts last year to bolster prices as the pandemic spread. It plans to ease the curbs by about two million barrels a day through July.

Baghdad may end up buying Exxon's 32.7pc stake in the West Qurna-1 oil field in southern Iraq, the minister said. If so, the Iraqi government would probably purchase it through state-owned Basra Oil Co, he said.

The US company is planning to sell the stake in the marquee field – which has recoverable reserves of more than 20 billion barrels – partly to reduce the mountain of debt it accumulated last year.

West Qurna-1 used to be considered one of the oil industry's glittering prizes, with Exxon becoming lead contractor in 2010. But tough contractual terms, payment delays, Opec production cuts and political instability have reduced its appeal in recent years.

Mr Abdul Jabbar also said Iraq would spend $3bn (€2.48bn) in the next five years to boost Basrah Gas Co's natural-gas output by around 40pc from 950 million standard cubic feet a day.

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A separate project to develop the eastern Mansuriya gas field with China's Sinopec will probably cost $2.1bn, he said.

Bloomberg


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