Petrochina buys 25 per cent of Exxon’s interests in Iraq field

City A.M. Reporter
PETROCHINA has bought a 25 per cent stake in the West Qurna-1 oilfield project from Exxon Mobil, strengthening China’s hold on Iraq’s energy resources.

China is already the top foreign player in Iraq’s oilfields, which are the largest in the Middle East open to foreign investment.

Iraq said in August that Exxon Mobil was selling more than half of its 60 per cent holding in the field – with Indonesia’s Pertamina taking 10 per cent.

The 25 per cent stake in the Technical Service Contract (TSC) for the vast oilfield gives “a larger and stronger presence in the upstream operations in the Middle East,” Petrochina, part of state-owned China National Petroleum Corp (CNPC), said in a statement.

Exxon remains operator of the project, despite reducing its stake to 25 per cent, while Pertamina has 10 per cent, Royal Dutch Shell 15 per cent and the Iraqi state keeps 25 per cent, oil ministry spokesman Asim Jihad said yesterday.

Long-term access to reserves is a strategic imperative for China, a major buyer of Iraqi crude, and Beijing is prepared to accept tougher terms and lower profits than Western oil majors, which have to answer to shareholders.

Iraq has the world's fourth-largest oil reserves and wants to at least double its production in the next few years and ultimately challenge Russia and Saudi Arabia as the world's biggest oil supplier.