Page 4 - MEOG Week 07 2023

MEOG COMMENTARY MEOG

News of West Qurna-1 sale as

Iran and Iraq agree co-operation

Indonesia’s state oil firm has provided a long-awaited update on ExxonMobil’s sale of its

stake in the supergiant Iraqi field while local and Iranian companies sign a collaboration deal

IRAQ INDONESIAN NOC Pertamina this week Wiko said that improving its reserve portfo-
reported that it has successfully added to its lio and increasing its reserve replacement ratio
shareholding in Iraq’s West Qurna-1 (WQ-1) was “part of our long-term development strat-
WHAT: project, apparently signalling the beginning of egy.” Meanwhile, he noted that the government
Pertamina and BOC the end for ExxonMobil’s participation in the of “Iraq has succeeded in adding a 10% stake”,
are reported to have asset. suggesting that ExxonMobil’s share has been
purchased 20% of The news follows a two-year-plus divestment reduced to 12.7%.
ExxonMobil’s stake in process for the company as well as a fraught If accurate, this would give a shareholder
West Qurna-1. period of negotiations with Baghdad. Mean- structure of PetroChina 32.7%; Pertamina 20%;
while, the state-owned Basra Oil Co. (BOC) Japan’s Itochu 19.6%; Basra Oil Co. (BOC), an
WHY: appears to have also added to its stake in the field affiliate of the Ministry of Oil (MoO), 15%; and
The news comes as as well as agreeing to collaborate with one of its ExxonMobil now the smallest shareholder,
the Iraqi firm signed Iranian counterparts on E&P. though remaining the project’s operator. At time
a deal with an Iranian of publication, Middle East Oil & Gas (MEOG)
counterpart for cross- Qurna update has been unable to verify this structure.
border collaboration. Pertamina this week reported that it has success- No valuation has been provided for the trans-
fully acquired an additional 10% shareholding action, though in July last year, the MoO sug-
WHAT NEXT: in the technical service contract (TSC) for the gested that it would pay around $300-350mn
Both Iran and Iraq are WQ-1 oilfield project. for a 10% share in WQ-1. At that point, then Oil
looking to ramp up Speaking to local outlet Dunia Energi last Minister Ihsan Abdul Jabbar said that accord-
production from their week, Pertamina Hulu Energi’s president direc- ing to a feasibility study, the Iraqi government
southern fields. tor Wiko Migantoro said that the deal was con- would recover the $300mn sum in just two years
cluded before the end of 2022. of WQ-1 operations.
“We have succeeded in adding 10%,” he said, The developers of WQ-1 are paid a maximum
noting that the participation had been acquired of just $1.9 per barrel of oil produced from the
from ExxonMobil, which has been looking to asset – less than $1.2 per barrel after deduction
divest its 32.7% operated stake since late 2020/ of taxes – under a 20-year technical services
early 2021. contract (TSC) signed in 2010. It is worth not-
John Anis, president director of PT Pertam- ing that the WQ-1 TSC also does not cover gas
ina Internasional EP said: “[We] had to work production, with China Petroleum Engineer-
hard. [We] negotiated for almost two years.” ing & Construction Corp. (CPECC) awarded

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