Iraq oil minister says deal with Exxon close, slowed by evacuation

Iraq oil

A general view of the West Qurna-2 oilfield in southern Basra, Iraq (file). Exxon Mobil has a long-term contract to improve the field.

A major oil deal between Iraq and Exxon Mobil was “very close” but had been slowed by Exxon’s decision on Saturday to evacuate its international staff from the West Qurna oil field, Iraq’s Oil Minister Thamer Ghadhban said yesterday. “Had we concluded we would have signed a heads of agreement,” he said, referring to a preliminary document that would set out terms of co-operation on the South Integrated Project .”But now they are out of the country, why should I run after them?” he said at an oil meeting in Jeddah.

Iraqi oil officials say Exxon evacuated all of its foreign staff from the West Qurna 1 field on Friday and Saturday, about 60 people. The US oil major has a long-term contract to improve the field. Its evacuation came days after Washington sent non-essential staff home from the US embassy in Baghdad over what it said was a security alert caused by threats from Iran. The US is ramping up sanctions pressure on Iran, especially over oil exports. Iraq relies heavily on natural gas from Iran for its electricity supply, which is stretched during hot summer months.

Ghadhban said there were a number of ways Iraq could compensate in case Iranian gas supplies were reduced, including using gas oil stores in some power plants, but so far there had been no change in supplies. Ghadhban separately said Iraq has almost 5mn barrels per day of oil capacity, with a current surplus capacity of around 400,000 bpd. “We are around 4.5mn bpd, which is our production rate that we agreed to in December last year,” he said.

Sources and photo-credits: Reuters, Gulf Times