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Exxon Oil Sale To Be Finalized By June

Iraq aims to finalize the sale of Exxon stakes in the West Qurna-1 oil field by end of June.

Iraq will be finalizing the sale of Exxon's stake in the West Qurna-1 oil field by the end of June despite the notion that Chevron Corp. has declined in buying the position.

Basra Oil Co. (BOC), a company run by the state is the one tasked to oversee production in the region. They are set to hold more talks with other companies that may be interested in buying Exxon's 32.7% stake when they submitted it for sale in January. 

Early this month the ministry mentioned that they were in talks with U.S. based companies that may be possible takers of Exxon's position. China oil giants China National Petroleum Corp. and CNOOC Ltd. have already expressed their interest as reported by Bloomberg last year. 

Should the Chinese companies be the successful buyers their influence in the field will increase given that PetroChina already owns 32.7% of it. Director General Khalid Hamza of the BOC has already stated in an interview that the ministry sees no problem with a Chinese company getting the stake. He added that they've hoped Chevron to be the replacement but apparently the company has no interest in the offer.

Exxon has been the lead contractor at West Qurna-1 oil field since 2010 but it's profitability and attractiveness has, at least on Exxon's perspective, has waned over the years due to tough contractual terms, cuts imposed by OPEC and the political instability in the region. And with the onset of the Covid-19 pandemic which caused their debt to balloon they see the sale as a practical means to reduce it. 

Hamza said that the position is open to any companies outside of the United States, and that they will also welcome either PetroChina or CNOOC as they are already existing partners, but added that the BOC itself or any of its other companies may also buy Exxon's stakes.


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