Iraq, Chevron reach agreement on West Qurna 2, signing set for year-end

Summary

• Iraq's oil ministry says it reached agreements with Chevron on the West Qurna 2 field contract.
• Both sides plan to sign the contract by the end of this year, the ministry said.
• The deal would deepen US corporate involvement in Iraq's largest producing oil region.

The latest

Iraq has reached agreements with Chevron on the contract for the West Qurna 2 oil field, Oil Minister Basim Mohammed Khudair al-Abadi said Tuesday, with both sides planning to sign by the end of this year. The minister said the Iraqi environment is currently attractive to investment, pointing to the presence of American companies in the country as evidence.

Details

• The meeting: The oil ministry said in a statement carried by the Iraqi News Agency that al-Abadi received Chevron's general manager for business development, Joe Cook, with Karim Yasser, director general of the petroleum contracts and licensing department, attending.
• What was agreed: Al-Abadi said the meeting was held to complete discussions and negotiations on matters related to the West Qurna 2 contract, and that agreements were reached along with planning for a signature before the end of the current year.
• Beyond West Qurna: The two sides also agreed to continue discussing the development contract for the Nasiriyah field and four exploration blocks, according to the minister, who did not set a timetable for concluding those separate negotiations.
• Ministry commitment: Al-Abadi said the oil ministry will provide support to Chevron and to other American companies operating in Iraq, and will remove all obstacles in their way. He did not specify which obstacles the ministry has in mind.
• Chevron's response: Cook thanked the oil minister and said he looked forward to building a long-term partnership and cooperation at both the West Qurna 2 and Nasiriyah fields, according to the ministry statement.
• Investment framing: The minister tied the talks to a broader argument that Iraq is now attractive to foreign capital, citing the presence of American firms in the country as the proof of that claim rather than any investment figure.
• Terms undisclosed: The ministry's account did not include the financial terms of the agreements, the production targets attached to West Qurna 2, or the length of the contract Chevron is expected to sign.
• Named participants: Only three officials were identified in connection with the talks: the oil minister, Chevron's business development chief Joe Cook, and contracts and licensing director general Karim Yasser.
• Also: Talks also continue on the Nasiriyah field and four exploration blocks.

Background

West Qurna 2 sits in southern Iraq's main producing basin, the country's core source of crude output and export revenue. The Nasiriyah field and the four exploration blocks are being handled as separate files in the same negotiating track with Chevron.

Between the lines

The sequencing is notable: agreements are described as reached on West Qurna 2 while Nasiriyah and the exploration blocks remain open, suggesting one field is being closed first and the rest kept as a continuing negotiation. The minister's pledge to remove all obstacles for American companies, paired with his investment-climate argument, frames the Chevron file as a political signal as much as a commercial one.

What's next

The signing of the West Qurna 2 contract is planned before the end of this year. Also worth tracking: whether talks on the Nasiriyah field and the four exploration blocks produce a separate agreement, and the contract's published terms.

Source: Iraqi News Agency (INA)