Page 9 - MEOG Week 31 2022

MEOG FINANCE & INVESTMENT MEOG

ExxonMobil’s West

Qurna-1 share to be split

IRAQ AN official from Iraq’s state-owned Basra Oil Middle East Oil & Gas (MEOG) understands
Co. (BOC) said this week that it intends to sell a that the technical services contract (TSC) for
portion of ExxonMobil’s 32.7% stake in the West WQ-1 does not contain any provision for the
Qurna-1 oilfield to Indonesia’s Pertamina. sale of a stake in the asset; rather that ExxonMo-
Speaking to the official Iraqi News Agency, bil would be entitled to compensation to recover
BOC’s deputy director-general Hassan Muham- capital expenditure related to the project, were it
mad Hassan said: “Pertamina, an Indonesian to be replaced.
state-owned oil and natural gas corporation The developers of WQ-1 are paid a maximum
based in Jakarta, will buy 10% of ExxonMobil’s of just $1.9 per barrel of oil produced from the
share in the West Qurna 1 oilfield in southern asset – less than $1.2 per barrel after deduction
Iraq.” of taxes – under a 20-year TSC signed in 2010.
He added: “This is what was agreed upon It is worth noting that the WQ-1 TSC also does
between the parties, and its implementation is not cover gas production, with China Petroleum
contingent upon signing the settlement agree- Engineering & Construction Corp. (CPECC)
ment with the BOC.” having been awarded a $121mn deal in late 2019
The Indonesian firm already holds a stake to upgrade facilities and increase the capture of
of 10% in the project and is partnered by Pet- flare gas at the field.
roChina (32.7%), Japan’s Itochu (19.6%), WQ-1 currently produces 460,000 barrels per
Pertamina (10%) and INOC subsidiary Oil day (bpd) along with around 150mn cubic feet
Exploration Co. (OEC, 5%). If completed, the (4.25mn cubic metres) per day of associated gas.
transaction would leave BOC with an operated In June last year, BOC signed a contract with
22.7% stake and Pertamina holding 20%. ExxonMobil and fellow US firm Schlumberger
Iraq affirmed its intention to acquire Exxon- to drill 96 wells allowing for an increase in out-
Mobil’s share in January, when Oil Minister Ihsan put capacity from the current 500,000 bpd to
Abdul Jabbar said the cabinet had “approved the 700,000 bpd. WQ-1 has combined oil and con-
Iraqi National Oil Company’s acquisition of Exx- densate reserves of more than 22bn barrels in
onMobil’s share in West Qurna-1” and the min- the southern portion of the broader West Qurna
ister said in June that a final investment decision deposit, with the northern WQ-2 project led by
(FID) had been taken. Russia’s Lukoil.™

Week 31 03•August•2022 www. NEWSBASE .com P9