Page 4 - MEOG Week 16 2021
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MEOG                                          COMMENTARY                                               MEOG




       Iraq seeks buyer for





       ExxonMobil’s stake





       in West Qurna-1






       Iraq’s Ministry of Oil last week said that it is holding talks with US firms for the
       potential purchase of ExxonMobil’s stake in the supergiant West Qurna-1 oilfield.




        IRAQ             IRAQ’S Ministry of Oil (MoO) said over the  Supergiant asset
                         weekend that it is holding discussions with US  WQ-1 has capacity to produce 500,000 barrels
                         companies over the acquisition of a 32.7% stake  per day (bpd) of oil from the remaining com-
       WHAT:             in the West Qurna-1 (WQ-1) oilfield currently  bined oil and condensate reserves of more than
       ExxonMobil has divested   held by super-major ExxonMobil.  22bn barrels in the northern portion of the
       nearly half of its original   In a statement provided to the official Iraqi  broader West Qurna deposit.
       stake in WQ-1 and now   News Agency (INA), the MoO said: “The min-  The developers are paid a maximum of just
       appears to be looking to   istry is studying with American companies the  $1.9 per barrel of oil produced from the asset –
       exit the project.  possibility of purchasing ExxonMobil’s share in  less than $1.2 per barrel after deduction of taxes
                         West Qurna-1 field in Basra Governorate”.  – under a 20-year technical services contract
       WHY:                ExxonMobil is the operator of the field and  (TSC) signed in 2010. It is worth noting that the
       At a maximum of just   holds a share of 32.7%, having divested nearly  WQ-1 TSC also does not cover gas production,
       $1.9, the field’s technical   half of its original 60%, and is partnered by Chi-  with China Petroleum Engineering & Con-
       services contract (TSC)   na’s PetroChina (32.7%), Japan’s Itochu (19.6%),  struction Corp. (CPECC) having been awarded
       has one of the lowest   Indonesia’s Pertamina (10%) and state-owned  a $121mn deal in late 2019 to upgrade facilities
       per barrel remuneration   Basra Oil Co (BOC, 5%).      and increase the capture of flare gas at the field.
       fees in Iraq and there are   The company promised to divest $15bn   Data from Wood Mackenzie estimates
       issues about long-term   worth of assets during 2019-2021, but only sold  that gross 2021 revenues from WQ-1 will be
                         off $1bn worth of assets in 2020. Earlier this  $5.03bn, with the state’s take amounting to
       WHAT NEXT:        year it sold its 32% stake in the 324-square km  $4.12bn through a combination of taxes and
       With Total now in place   Baeshiqa licence in Iraqi Kurdistan to Norway’s  royalties, based on a capital expenditure of $5.44
       as lead developer of the   DNO.                        per barrel.
       crucial seawater supply
       project that is intended
       to allow output from
       southern fields like WQ-2
       to increase significantly,
       ExxonMobil’s departure
       appears all but signed off.























       P4                                       www. NEWSBASE .com                           Week 16   21•April•2021
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