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(Bloomberg) – Iraq plans to ask a choose group of main U.S. oil firms for direct negotiations over the acquisition of Lukoil PJSC’s stake within the large West Qurna-2 oil discipline, as Baghdad accelerates efforts to reshape possession of one in every of its key power belongings.
The Oil Ministry stated in an announcement that it’s going to method “a restricted quantity” of main American producers as a part of a course of to switch the Russian firm’s share within the southern discipline.
The US introduced sanctions on Lukoil in October, a transfer that has pitted the corporate into promoting its worldwide belongings. A key element within the course of is that the Trump administration would favor that Lukoil’s world belongings are taken over by a U.S. entity, a truth which will restrict the pool of potential patrons, folks with information of the matter stated final month.
“Transferring the administration of the West Qurna-2 discipline to one of many U.S. oil firms will serve mutual pursuits, strengthen the soundness of world markets and guarantee Iraq’s oil manufacturing and market share,” the ministry stated.
The ministry didn’t disclose which companies can be invited or the anticipated timeline for a remaining settlement. Nonetheless, ExxonMobil and Chevron have been amongst U.S. oil firms thinking about a minimum of a few of Lukoil’s worldwide belongings, Bloomberg beforehand reported.
Spokespeople for each U.S. oil giants declined to remark after the ministry’s assertion.
See additionally: Exxon, Chevron and ADNOC discover bids for Lukoil’s worldwide belongings
Baghdad has already elevated its oversight of the venture.
In November, the federal government assumed accountability for advertising Lukoil’s crude output from the sector, guaranteeing flows continued regardless of the sanctions. Lukoil has operated West Qurna-2 for the reason that early 2010s, serving to ramp up manufacturing at a discipline that holds near 13 Bbbl of recoverable reserves.
Iraq, OPEC’s second-largest producer, has been looking for to rebalance overseas participation in main upstream belongings to draw Western funding and bolster technical capabilities.
Securing a U.S. operator would dovetail with Washington’s strategic preferences whereas signaling Baghdad’s intent to deepen power ties with American companies.
Additional particulars on the choice and bidding course of are anticipated within the coming weeks.
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