Iraq could nearly double its output from West Qurna 2 oilfield to 800,000 barrels per day as Chevron enters exclusive talks to take over operations from Russia's Lukoil, Iraq's oil minister said on Wednesday.
Iraq has been seeking to increase its oil and gas production, with oil majors vying to expand their operations in Iraq, after they had previously scaled back due to years of political instability.
Oil Minister Hayan Abdel-Ghani told Kurdish TV channel Rudaw that output could rise to between 750,000 and 800,000 bpd after Chevron takes over the operations in the field. The US firm has secured one-year exclusive rights to negotiate taking over the project.
The deal would expand Chevron's footprint by giving it control of one of the world's largest oilfields, which accounts for nearly 10% of Iraq's production and about 0.5% of global supply.
Chevron had already agreed to develop several fields in the country as part of an international expansion.
The Chevron deal is the latest in a string of agreements with global oil majors such as Exxon, BP, and TotalEnergies, in which Baghdad offers more generous terms in a bid to beef up production.
Iraq, the second-largest producer within the OPEC+ group comprising the Organization of the Petroleum Exporting Countries and allies including Russia, plans to raise oil production capacity to more than 6 million barrels per day (bpd) by 2029.
It has frequently produced in excess of its agreed target with OPEC+.
The deal could also bolster relations between Baghdad and Washington, which threatened to curb Iraq's access to oil revenues if Iranian-backed groups were included in the upcoming government.
The agreement with Chevron, however, aligns Iraq more closely with Western energy interests as a US major replaces a sanctioned Russian firm, Lukoil, within broader efforts to isolate Moscow over its war in Ukraine.
Lukoil declared force majeure in November at West Qurna 2 after it was hit with sanctions alongside Rosneft as part of US President Donald Trump's push to end the war in Ukraine.
Iraq stripped Lukoil of operatorship of the field in January and temporarily transferred the field to the state-run Basra Oil Company (BOC).
In January, Iraq's cabinet said an "amicable settlement" with Lukoil for the transfer was approved. A final deal requires approval from Iraq's cabinet and the US Office of Foreign Assets Control, Chevron has said.
