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Friday, Nov 9, 2012 5:45 PM UTC

Iraq official: Exxon seeks exit deal this year

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Topics: From the Wires,

BAGHDAD (AP) — Exxon Mobil expects to reach a deal by year’s end to sell its stake in a major oil field in southern Iraq, an Iraqi official said Friday.

Faisal Abdullah, spokesman for Iraq’s deputy prime minister for energy affairs, said the oil giant has reached out to several companies — including Royal Dutch Shell, Lukoil, BP, CNPC and Eni — about its stake in the 8.6 billion barrel West Qurna Phase 1 project.

Exxon declined to comment, maintaining a position it has held for weeks.

Irving, Texas-based Exxon Mobil is the main developer of West Qurna-1. It was awarded rights to work on the field in 2009 along with minority partner Royal Dutch Shell PLC.

The other companies had no public comment or could not be reached. Russia’s Interfax news agency quoted a Lukoil official as saying the company has received an offer from Exxon and is still considering it.

“We’ve received Exxon’s offer,” Lukoil’s head of foreign operations Andrey Kuzyayev told Interfax. “But we did not come up with a decision today.”

Lukoil, Russia’s No. 2 oil producer, is already developing the 12.9 billion-barrel West Qurna-2 field. Lukoil had been granted the development rights in 1997 by Saddam Hussein, only to see the $3.7 billion contract rescinded by the dictator five years later.

Exxon upset Baghdad last year when it agreed to hunt for oil in Iraq’s self-ruled Kurdish region.

The Kurds and the central government disagree over how to develop Iraq’s vast oil reserves. Baghdad wants to manage the resources nationwide, but the Kurds insist the constitution allows them to sign deals on their own.

That disagreement continued to play out Friday, with Abdullah saying that Iraq has warned Russia’s Gazprom that it must decide whether to keep its own deals with the Kurds or give up rights to develop the 100 million barrel Badra field in central Iraq.

Gazprom agreed to develop two oil deals in the northern Kurdish region in August.

Iraq needs foreign investment to develop its natural resources after decades of war, U.N. sanctions and neglect.

___

Associated Press writers Adam Schreck in Baghdad and Mansur Mirovalev in Moscow contributed to this report.

More Sinan Salaheddin.

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