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Iraq has officially asked Russia’s Lukoil company to hand over one of the world’s largest oilfields to a consortium of national and Italian companies.
In a letter sent to the Russian oil giant on Monday, the Iraqi oil ministry said the southern West Qurna 2 oilfield would be operated by state-owned Basra Oil Company in partnership with Iraq’s Hilal Al-Basra and the Italian contractor Bonatti International.
The request coincided with new statements that the US-based Chevron has entered negotiations to manage West Qurna 2 field.
Iraq, OPEC’s second largest oil producer, said last month it has decided to give management of the field to Basra Oil Company, which controls 25 percent of the field after Lukoil decided to quit under the pressure of US sanctions on Russia.
The move came nearly a month after Baghdad invited US oil majors to manage the giant field, which pumps nearly 10 percent of Iraq’s crude output and has estimated proven crude deposits of around 14 billion barrels.
In the letter published on its website, the oil ministry said the cabinet has taken a decision allowing Basra oil company to assume the management of West Qurna 2 oil operations through a contract with a consortium of Hilal and Bonatti for six months, renewable for a further six months.
“This is a force majeure mitigation measure in respect to the force majeure declared by the operator of the field,” the letter said.
“Your are requested to inform us of your feedback and approval as per your request in the meeting held in Baghdad on 26 January,” the letter added.
Iraq’s Shafaq news agency on Wednesday quoted a Basra Oil Company official as saying that Chevron has entered talks to assume management of the field.
Kazem Abdul Hassan Karim, the company’s deputy director for oilfields affairs, told the agency that Chevron joined discussions to operate the field after the transitional phase, noting that the Iraqi company is prepared to take over direct management if talks do not result in an agreement.
Karim said the Basra Oil Company had requested renewal of the operating license, which expires on February 28, and confirmed that financial obligations between the Russian side remain under negotiation.
“An outcome is expected within 24 days, and failure to settle could lead to the activation of force majeure clauses under the contract,” he said.
(Writing by N Saeed; Editing by Anoop Menon)
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