Iraq Aims to Clinch Exxon Oil Sale by June Even as Chevron Balks

Iraq aims to finalize the sale of Exxon’s stake in the West Qurna-1 oil field by the end of June even after rival U.S. supermajor Chevron Corp. rejected overtures to buy the position. Basra Oil Co., the state-run company overseeing crude production in the region, may open talks with more companies after Exxon submitted a request to sell its 32.7% stake in January, Director General Khalid Hamza said in an interview. BOC has “no objection” to a Chinese company buying the stake, he said.

Earlier this month, the country’s oil ministry specified it was in talks with U.S. companies about the possibility of them taking Exxon’s position as the field’s operator. China’s oil giants China National Petroleum Corp. and CNOOC Ltd. were considering buying the stake, Bloomberg News reported last year. Such a deal would increase the country’s influence in the field, given that PetroChina already owns 32.7% of it.

“We hoped that Chevron would buy Exxon’s share and be the replacement, but it seems that they didn’t have the desire to be the replacement,” Hamza said. A Chevron spokesperson declined to comment, while an Exxon spokesperson didn’t immediately respond to a request for comment.

Exxon became lead contractor at West Qurna-1 in 2010 as the country sought to rebuild its oil industry following the Second Gulf War and years of insurgency. But the field’s profitability and attractiveness for future investment has waned in recent years due to tough contractual terms, OPEC production cuts and political instability. One of Exxon’s key priorities is to reduce debt after Covid-19 crushed cash flow last year.

Hamza said Iraq is open to companies from outside of the U.S. buying Exxon’s position.

“We have no objection either on PetroChina nor CNOOC, they are our partners already,” Hamza said. “BOC may buy Exxon’s share, or any of the oil ministry’s companies may buy.”

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