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Iraq Wants American Firm to Replace Exxon, Prime Minister Says

An Iraqi staff of the West Qurna-1 oilfield, which is operated by ExxonMobil, walks past the West Qurna-1 oilfield, Iraq June 17, 2019. (Reuters)
An Iraqi staff of the West Qurna-1 oilfield, which is operated by ExxonMobil, walks past the West Qurna-1 oilfield, Iraq June 17, 2019. (Reuters)
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Iraq Wants American Firm to Replace Exxon, Prime Minister Says

An Iraqi staff of the West Qurna-1 oilfield, which is operated by ExxonMobil, walks past the West Qurna-1 oilfield, Iraq June 17, 2019. (Reuters)
An Iraqi staff of the West Qurna-1 oilfield, which is operated by ExxonMobil, walks past the West Qurna-1 oilfield, Iraq June 17, 2019. (Reuters)

Iraq’s Prime Minister Mustafa al-Kadhimi said on Monday he wants another American company to replace Exxon Mobil Corp when it exits Iraq.

Exxon, which in 2019 had looked poised to move ahead with a $53 billion project to boost Iraq’s oil output, has been seeking to sell its 32.7% stake in one of Iraq’s biggest oilfields, West Qurna 1.

“Exxon Mobil is considering exiting Iraq for reasons that are to do with its internal management practices, decisions, and not because of the particular situation in Iraq,” Kadhimi told a small group of reporters in Washington after talks with President Joe Biden.

“When Exxon Mobil departs, we will not accept its replacement to be other than another American company,” he added, speaking through a translator.

Kadhimi did not specify which American companies might be interested. Chevron Corp also operates in Iraq.

In May, Iraq’s Oil Minister Ihsan Abdul Jabbar said the country was considering purchasing Exxon’s West Qurna stake through state-owned Basra Oil Co.

When contacted by Reuters, Exxon said in a statement that it had entered into an agreement with Petrochina and China’s offshore oil and gas major CNOOC Ltd to sell its West Qurna interest in January 2021.

Exxon added that Indonesia’s Pertamina has since exercised its right to purchase the interest that would have been sold to CNOOC.

The statement also said Exxon has filed for arbitration against Basra Oil over Exxon’s sale of the West Qurna stake. It did not mention a sale to a US firm.

“The sale aligns with ExxonMobil’s strategy to focus on advantaged assets with the lowest cost of supply, including developments in Guyana, Brazil and the US Permian Basin,” the statement said.

Securing foreign investment is critical for Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC). Oil revenue represents at least 95% of Iraq’s income.

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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.