Iraq is pressing ahead with plans to boost its crude oil production capacity by more than 50 percent within the next five years, banking on cooperation between Western and Chinese oil majors, officials and analysts said.

Supermajors including ExxonMobil, Chevron, TotalEnergies, BP, and PetroChina are driving efforts to add nearly 2.5 million barrels per day (bpd) to Iraq’s current capacity of 4.4 million bpd, raising total capacity to nearly seven million bpd by 2030.

The larger part of the extra output could come from Majnoon oilfield, one of the world’s largest single crude reservoirs with a potential to pump 1.8 million bpd.

In early October, Iraq signed a heads of agreement (HOA) with ExxonMobil for Majnoon’s development, marking the U.S. firm’s return to Iraq nearly a year after it exited the West Qurna 1 field, which it handed over to China's PetroChina.

Prime Minister Mohammed Al-Sudani had said after the signing that Iraq needs to work with major oil companies, particularly US firms to develop its oil fields and expand output.

The southern fields of Majnoon, West Qurna, Rumaila and Zubair contain more than 80 percent of Iraq’s proven crude deposits of nearly 145 billion barrels.

PetroChina holds the main stake in West Qurna 1, one of the world’s largest oil reservoirs, with proven reserves exceeding 20 billion barrels and output of about 550,000 bpd.

In 2024, rating agency S&P Global said Chinese companies are set to play a key role in Iraq’s upstream development plans after they won the bulk of 14 contracts included in the fifth and sixth bidding round.

“I don’t see rivalry but rather unannounced collaboration between the US and Chinese companies to achieve one target, which is expanding Iraq’s oil production capacity,” said Walid Khaddouri, an Iraqi analyst and former information director at the Organisation of Arab Petroleum Exporting Countries (OAPEC).

“If there is competition, the focus is how to get a good contract…I believe Iraq is now offering better contractual terms to foreign oil majors to attain that target (of capacity expansion),” he told Zawya Projects.

Other foreign firms have been awarded contracts to develop Iraq’s largest four oilfields. BP grabbed four northern oilfields that will pump over 400,000 bpd.

“I believe ExxonMobil chose to take over Majnoon field given its massive reserves of nearly 38 billion barrels in place and the possibility that it will cooperate with TotalEnergies in South Iraq,” said Nabil Al-Marsoumi, an energy expert and professor at Basra University.

He added that the deal, if materialised, could “significantly contribute to Iraq’s goal of reaching seven million bpd and sustaining that level for years."

Oil Minister Hayan Abdul Ghani said last month Iraq aims to achieve 5.5 million target in 2025 through expansion in well drilling and rehabilitation operations, building surface facilities and pipelines, and increasing water injection.

(Reporting by N Saeed; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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