Iraq Signs Major Oil Development Deal with ExxonMobil
Reports from Reuters reveal that Iraq is set to sign an agreement with ExxonMobil, the Texas-based oil major, to oversee the management, development, and operation of the Majnoon oil field located in the country’s southern region. The deal will also encompass enhancements to Iraq’s oil export infrastructure in the south, along with a profit-sharing arrangement for both crude and refined products. The formalization of this agreement is expected to involve Iraq’s State Organization for Marketing of Oil (SOMO) in conjunction with ExxonMobil and the state-owned Basra Oil Company.
According to Bloomberg, ExxonMobil has recently reached a non-binding heads of agreement with Baghdad to re-enter Iraq, marking its return after a two-year hiatus.
Prime Minister of Iraq, Mohammed Shia al-Sudani, confirmed the preliminary deal but refrained from divulging specific details. A spokesperson from Exxon stated to Reuters, “We are pleased to have signed an HoA with the Iraqi Oil Ministry to evaluate exploration, development, and oil marketing opportunities in Iraq.”
The Majnoon oil field, situated approximately 60 kilometers from Basra, is recognized as one of the world’s largest oil reserves, estimated to hold around 38 billion barrels of oil. The agreement aims to secure storage capacity in Asian markets, potentially leveraging Exxon’s facilities in Singapore.
Former operations manager at the Basra Oil Company, Muwafaq Abbas, emphasized that this deal signifies Iraq’s efforts to modernize its energy sector and strengthen ties with western markets. “The deals carry political weight, signaling Baghdad’s intent to rebalance regional ties and deepen its integration with western markets,” Abbas remarked.
ExxonMobil, a pioneer among western companies in Iraq post the 2003 US invasion, exited the West Qurna-1 project in 2024 due to unsatisfactory returns and political complexities. This new agreement coincides with a surge of Chinese-led projects reshaping Iraq’s southern oil hub.
In September, China Petroleum Pipeline Engineering (CPP) sealed a $2.5 billion deal to construct a 950-kilometer seawater distribution system supplying Majnoon and other fields, aimed at sustaining production by maintaining reservoir pressure. Furthermore, PowerChina secured a $4 billion contract for Iraq’s inaugural major seawater desalination plant in Basra in July, a project designed to support industrial and energy operations across the region.
Chinese private oil companies are planning to double their collective output in Iraq to 500,000 barrels per day (bpd) by 2030, underscoring Beijing’s expanding control over mid and downstream infrastructure.
Noteworthy is Iraq’s ambition to elevate its oil production from approximately 4 million bpd to over 6 million by 2029, given its substantial oil and gas reserves, positioning the country as a key player in the global energy landscape.
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