Page 10 - MEOG Week 19 2021

MEOG FINANCE & INVESTMENT MEOG

Iraq asks to buy Exxon’s WQ-1 stake

IRAQ FOLLOWING weeks of speculation, Iraq’s Basra in payment of operating costs, production man-
Oil Co. (BOC) has submitted a formal request agement and the development of the field.”
to acquire ExxonMobil’s 32.7% stake in the West Meanwhile, he noted that the Iraqi govern-
Qurna-1 oilfield development project. ment had approved 2021 investment budgets
Speaking to Reuters on May 10, BOC’s direc- presented by IOCs for the development of the
tor-general Khalid Hamza Abbas said: “A deci- prolific southern oilfields under BOC’s remit,
sion has been made and we sent a formal letter to adding that the approved budget was around
ExxonMobil asking to buy its share.” He added $7bn.
that Exxon anticipates a return of $350mn for A week earlier, Hamza Abbas was quoted
the stake, valuing the remaining nine years of the as saying: “We hoped that Chevron would buy
20-year technical services contract (TSC) signed Exxon’s share and be the replacement, but it
in 2010 at $1.07bn. seems that they didn’t have the desire to be the
The developers are paid a maximum of just replacement. [The MoO] told us officially, with
$1.9 per barrel of oil produced from the asset – an official letter, referring to the contractual text
less than $1.2 per barrel after deduction of taxes. … that ExxonMobil [is proceeding toward] sell-
WQ-1 has capacity to produce 500,000 bpd of ing its share to a coalition of the two companies,
oil from remaining combined oil and condensate PetroChina and CNOOC.”
reserves of more than 22bn barrels in the north- He noted: “We have no objection either on
ern portion of the broader West Qurna deposit. PetroChina nor CNOOC; they are our partners
ExxonMobil, which operates the field, has already.”
already divested nearly half of its original 60%
and is partnered by PetroChina (32.7%), Japan’s Output update
Itochu (19.6%), Indonesia’s Pertamina (10%) The southern fields budget is expected to facili-
and Iraq’s state-owned Oil Exploration Co. tate a 100,000 barrel per day increase in produc-
(OEC, 5%). Hamza Abbas said that once it had tion of Basrah Light, taking the total output level
acquired the stake, BOC would liaise with the to 1.1mn bpd.
other partners to ensure operations continue Hamza Abbas added that the country’s May
running smoothly. oil exports had averaged 2.85mn bpd, down
“The Ministry of Oil and the Ministry of from 2.9mn bpd in April. According to a sur-
Finance are committed with us to securing vey by S&P Global Platts, Iraq’s production has
financing for these shares because this is not only continued to rise, reaching 3.97mn bpd in April,
about buying shares, but also about participation compared with 3.95mn bpd a month earlier.™

P10 www. NEWSBASE .com Week 19 12•May•2021