Iraq’s Oil Ministry has awarded a 20-year contract to the US’ ExxonMobil Corporation and the UK/Dutch Shell Group for the development of the West Qurna oil field in Basra province.
An ExxonMobil spokesman confirmed that the international oil company had signed a deal with the ministry in Baghdad on 5 November.
“We have agreed with Iraq’s Oil Ministry on the principles of the rehabilitation and development of the West Qurna field and look forward to completing the contract,” says the Exxon spokesman.
Exxon confirmed Shell is its consortium partner in the West Qurna project. The deal still needs the approval of Iraq’s cabinet.
Shell declined to comment as Exxon is leading the consortium. West Qurna holds 15 billion barrels of oil reserves.
In October, a ministry spokesman said companies negotiating for the field included Exxon with Shell, Russia’s Lukoil, France’s Total and China National Petroleum Corporation.
Energy consultancy IHS Global Insight estimates that the field currently produces 270,000 to 280,000 barrels a day (b/d) of oil. Exxon and Shell aim to increase production to 2.1 million b/d within seven years.
The Oil Ministry tried to award the contract to develop West Qurna in its first oil licensing round in June, but failed to finalise a deal.
Exxon declined to say how much the ministry will pay it for every barrel of oil it produces from West Qurna.