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Iraq Considering Buying Exxon Stake in West Qurna 1 Oilfield

Oil tankers are seen at a terminal of Sinopec Yaogang oil depot in Nantong, Jiangsu province, China June 11, 2019. (Reuters)
Oil tankers are seen at a terminal of Sinopec Yaogang oil depot in Nantong, Jiangsu province, China June 11, 2019. (Reuters)
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Iraq Considering Buying Exxon Stake in West Qurna 1 Oilfield

Oil tankers are seen at a terminal of Sinopec Yaogang oil depot in Nantong, Jiangsu province, China June 11, 2019. (Reuters)
Oil tankers are seen at a terminal of Sinopec Yaogang oil depot in Nantong, Jiangsu province, China June 11, 2019. (Reuters)

Iraq is considering buying ExxonMobil's stake in the southern West Qurna 1 oilfield through state-owned Basra Oil Co (BOC), the country's oil minister said on Monday.

The oil ministry is discussing BOC "taking ownership of the Exxon stake in West Qurna 1 and leading the project, as happened with Majnoon," Ihsan Abdul Jabbar told a news conference, referring to the huge Majnoon oilfield in Iraq's south.

Iraq said last month that ExxonMobil was seeking to sell its 32.7% stake in the West Qurna 1 field, and that the oil ministry had started discussions with US oil companies over a possible purchase.

ExxonMobil did not respond to a request for comment.

Abdul Jabbar also said at the news conference that the development of Iraq's Mansuriya gas field near the Iranian border is expected to cost $2.1 billion.

China's Sinopec last month won a deal to develop the field in partnership with Iraq's state-run Midland Oil Company.

He said talks with some foreign companies to develop Iraq's western Akkas gas field near the borders with Syria "are moving very slowly", without elaborating.

Iraqi oil officials close to the talks said France's Total and Chevron Corp are among the companies interested in developing Akkas.

Abdul Jabbar added that he does not expect oil prices to drop below $65 a barrel and that lower oil prices should not be a concern after OPEC+ eases production cuts from May.

As a part of its drive to boost gas production, Iraq plans to invest $3 billion in Basra Gas Co over the next five years to increase its production capacity by 40% to 1.4 billion cubic feet (bcf) a day, said Abdul Jabbar.

Basra Gas Co is a joint venture between state-owned South Gas Company, Shell and Mitsubishi.

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Iraqi Central Bank Discusses Foreign Transfer Mechanisms with US Delegation

The Governor of the Central Bank of Iraq meets a US delegation in Baghdad. (Central Bank of Iraq)
The Governor of the Central Bank of Iraq meets a US delegation in Baghdad. (Central Bank of Iraq)
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Iraqi Central Bank Discusses Foreign Transfer Mechanisms with US Delegation

The Governor of the Central Bank of Iraq meets a US delegation in Baghdad. (Central Bank of Iraq)
The Governor of the Central Bank of Iraq meets a US delegation in Baghdad. (Central Bank of Iraq)

Governor of the Central Bank of Iraq Ali Mohsen Al-Alaq held talks with Steve Lutes, Vice President of Middle East Affairs at the US Chamber of Commerce and Chairman of the US-Iraq Business Council mechanisms for international trade and Iraq’s shift to fully utilizing correspondent banks for foreign transfers. 

Sunday's discussions in Baghdad follow the US blacklisting of 14 Iraqi banks - half of the country’s total banks - on suspicions of involvement in money laundering and transferring funds to Iran and Syria. The move has prevented these banks from conducting dollar transactions.

According to a statement by the Central Bank of Iraq on Sunday, the meeting, which was also attended by the Directors General of the Investments Department and the Banking Supervision Department, addressed “banking and economic relations” between Iraq and the US. They covered a visit by a Central Bank delegation to Washington in April, during which the delegation will meet with officials from the US Chamber of Commerce and American companies.

The two sides also touched on US companies’ interest in investing in Iraq’s energy, infrastructure, and advanced technology sectors, as well as opportunities arising from Iraq’s current security stability.

Al-Alaq emphasized the Central Bank’s role in supporting Iraq’s economic growth and pledged full support to global firms, including US companies and banks, looking to invest in the country. He stressed the importance of diversifying investment sectors to bolster economic development.

Since the beginning of 2023, the Central Bank of Iraq has implemented a monitoring system for dollar transactions through a specialized platform, which was designed to regulate financial transfers by Iraqi banks and provide proactive oversight, replacing the US Federal Reserve’s previous practice of auditing daily transfers. However, the Central Bank decided to discontinue the platform at the beginning of 2024.

The closure triggered significant withdrawals of deposits by individuals and companies, amid concerns that the banks holding their funds might face bankruptcy due to non-compliance with the Central Bank’s requirements and the US Treasury Department’s standards.

According to Central Bank data, the total volume of deposits in Iraq’s commercial banks fell to its lowest level in 22 months, dropping to 123 trillion Iraqi dinars in November 2024, compared to 127.5 trillion dinars in October.

Between June and November 2024, deposits decreased by 7 trillion dinars, reflecting a continued trend of declining savings in the banking sector over recent months.