Chevron Set to Purchase Lukoil’s Key West Qurna 2 Oilfield in Iraq

Chevron Eyes Acquisition of Iraq’s West Qurna 2 Oilfield

Chevron has entered into an initial agreement with Iraq’s Basra Oil Company to explore the possibility of acquiring the massive West Qurna 2 oilfield. This field, previously managed by Russia’s Lukoil, is now under the control of the Iraqi state oil firm.

The memorandum of understanding, signed earlier this week, permits both parties to share confidential information. This could pave the way for Chevron to enter exclusive negotiations to operate West Qurna 2, following its recent transfer to Basra Oil Company.

According to a statement reported by Bloomberg, the agreement sets the stage for a period of exclusive talks. However, Chevron emphasized that the deal will only move forward if it receives approval from the Iraqi federal government and other regulatory bodies, including the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).

Just last week, Iraq and Lukoil—now subject to U.S. sanctions—reached an amicable agreement to hand over West Qurna 2’s operations to Basra Oil Company.

Lukoil previously held a 75% ownership stake in West Qurna 2, a field that produces over 400,000 barrels of crude oil per day.

At the end of January, Lukoil revealed it had reached a deal to sell most of its overseas assets to private equity firm Carlyle.

This arrangement is not exclusive and remains contingent on securing all necessary regulatory clearances, including authorization from OFAC.

Despite the Carlyle deal, Chevron and a consortium led by an investment bank are reportedly continuing discussions with Lukoil and U.S. authorities to potentially acquire some of Lukoil’s international holdings.

Lukoil, Russia’s second-largest oil producer, stated in a press release that it is still in talks with other interested buyers as well. Read more.

Following the imposition of U.S. sanctions on Lukoil and Rosneft—citing Russia’s insufficient efforts toward peace in Ukraine—Lukoil announced in October that it would divest all its international assets and formally invited bids from prospective buyers.

By Tsvetana Paraskova for Oilprice.com

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