PetroChina Co., the country’s biggest oil and gas producer, agreed to buy a 25 percent stake in Iraq’s West Qurna 1 field from Exxon Mobil Corp., adding to assets that produce about half the Middle Eastern nation’s oil.
Exxon owns 60 percent of a contract to drill for crude in the field. PetroChina’s interest will allow it to “achieve synergies with its other projects in Iraq,” the Beijing-based company said in a statement. It didn’t disclose how much it’s paying for the stake. Exxon will also sell a 10 percent stake to PT Pertamina, Indonesia’s state-owned oil producer, Iraq’s Oil Ministry spokesman Asim Jihad said by phone.
West Qurna 1 is near the Rumaila field run by BP Plc and China National Petroleum Corp., PetroChina’s state-owned parent. Exxon’s stake in the field could be worth $3 billion, according to an August estimate by Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein. The world’s biggest oil company by market value planned to produce about 600,000 barrels of oil a day by the end of 2013, Madhi Abdul Razzak, the oilfield’s Joint Management Committee head, said in March.
“PetroChina has all the expertise in developing mature fields at a relatively low cost,” said Shi Yan, an analyst with UOB-Kay Hian Ltd. “They have several projects in the southern part of the country and collectively they can find a way to deploy their equipment and crew members more effectively.”
David Eglinton, Exxon’s Houston-based spokesman, didn’t immediately respond to an e-mail after hours seeking comment.
CNPC produces about 1.65 million barrels of oil a day from its Iraqi projects, the company said in October 2012. The Middle Eastern country, home to the world’s fifth-largest crude reserves, is producing 3.3 million barrels a day and in August exported 2.58 million barrels a day, according to Deputy Prime Minister for Energy Affairs Hussain al Shahristani.
Exxon angered Iraq by reaching agreements with the semi-autonomous Kurdish region in the north. The company made a “serious error” by signing a contract to explore for oil in the Kurdish region without the approval of the central government, Shahristani said in a September interview. That is why Iraq is demanding Exxon and other foreign companies quit their business in fields controlled by it, he said.
Royal Dutch Shell Plc owns 15 percent and Oil Exploration Co. of Iraq 25 percent of the West Qurna 1 field.