PetroChina mulls further step towards Iraqi oil dominance

Chinese energy giant PetroChina will be joining Exxon Mobil to develop Iraq’s West Qurna oilfield and is in talks with Lukoil to buy a second project at the field, Reuters has reported.

The news site quoted an industry source with direct knowledge of the deal, saying the agreement would be announced within week.

Exxon currently holds a 60 per cent stake in the $50bn West Qurna project, pumping out around 480,000 barrels per day (bpd). West Qurna-2 is expected to produce 500,000 bpd in 2014 and needs a total investment of $30bn. This would be a big win for PetroChina, which already dominates the oilfields around southern Iraq.

With regards to the talks Lukoil, the source didn’t give any indication to the size of the deal being discussed. He did say, however, that Lukoil would prefer a Chinese partner in the project.

Earlier today, the Internation Energy Association said that oil production in Iraq fell below three million bpd for the first time in five months in July, after repeated bomb attacks on a major pipeline running from the Nineveh province to Turkey's Ceyhan port on the Mediterranean. It predicted a further fall of 500,000 bpd in September as infrastructure work takes place.