Iraq Favours Bids By CNPC And Lukoil

Iraq would favour bids by Russia’s Lukoil and China’s CNPC if they decided to buy ExxonMobil’s stake in the West Qurna-1 oilfield, a senior oil ministry official said.

Baghdad had received “positive signals” from both companies that they would consider making an offer, the official added.

The sale of the stake to either company, if it goes through, would significantly strengthen the position of Russia and China in exploiting Iraq’s oil reserves, the world’s fourth biggest.

Exxon has informed Baghdad it wanted to pull out of the $50 billion West Qurna 1 project to focus on its deal for exploration blocks in Iraq’s autonomous Kurdish region.

“During two separate meetings with executives from CNPC and LUKOIL, Iraq informed the companies that it favours their contribution to purchase Exxon’s share in West Qurna-1 oilfield,” he said.

Baghdad rejects contracts signed between foreign oil companies and the Kurdistan regional government as illegal and told Exxon it had to choose between working in southern Iraq or Kurdistan.

The US oil major opted to stick with Kurdistan, where the contracts are seen as more lucrative.

Lukoil, Russia’s second largest crude producer, said last week that it would study an offer from Exxon to take over the field.

Reuters