Halliburton says it isn’t interested in Exxon’s Iraq oilfield stake
HOUSTON (Bloomberg) --Halliburton Co. denied reports that it’s in talks to buy Exxon Mobil Corp.’s stake in the huge West Qurna-1 oil field in southern Iraq.
The world’s biggest oil-fracking provider on Monday refuted comments made by Iraqi Oil Minister Ihsan Abdul Jabbar that Halliburton is vying for an ownership stake in the field. While Halliburton at one point held talks about providing services to a potential buyer, “such discussions ended,” said Emily Mir, a spokeswoman for the Houston-based contractor. “We are not buying oil fields,” she added.
Iraq appears eager to secure a U.S. buyer for Exxon’s stake in the field, one of the largest oil deposits in the world. While the oil major entered into an agreement to sell the asset to Chinese firms PetroChina Co. and CNOOC Ltd. in January, it has failed to get the Iraqi government’s support for the deal. As a result of the delay, Exxon filed for arbitration against Basra Oil Co. with the International Chamber of Commerce earlier this year.
Abdul Jabbar told reporters in Baghdad Sunday that Iraq wants a U.S. partner for Exxon’s stake in the 20 billion-barrel deposit and would step in and buy the field if Halliburton does not. He said a few days ago that Iraqi state company Basra Oil Co. is a potential buyer.
“Basra Oil wants to acquire Exxon stake, but to maintain the balance of partners and market, we support a U.S. partner,” Jabbar said.
While Halliburton has long been one of Exxon’s primary contractors at the field, taking an actual ownership stake would be a rarity for a company focused on mapping, fracking and rehabilitating assets owned by other companies.
Halliburton previously held discussions with American investment firm Twelve Seas about providing services in Iraq, Mir said in an email. “These discussions are typical course of business for us and similar to talks we have with customers everywhere – none of which call on us to buy an oil field,” she said.
Exxon’s Exit
Exxon was among the first Western oil explorers allowed into Iraq in 2010 as the Middle Eastern nation sought to rebuild its energy industry following the fall of Saddam Hussein and years of conflict. Before that, Iraq’s crude bounty had been mostly off limits to foreigners for around 40 years. But the company soured on West Qurna amid tough contractual terms, OPEC supply constraints and ongoing political instability.
Abdul Jabbar also said his ministry is in discussions with Chevron Corp. on the economic model of the contract for its potential investment in the southern city of Nasiriya. He’s expected to sign a deal with the U.S. firm in the first quarter of 2022.
Iraqi National Oil Co. would be Chevron’s partner in the oil exploration investment with a 40% stake in the venture. The U.S. oil giant will conduct exploration work in the city, with an estimated daily output of 600,000 barrels for at least 10 years, the minister said.
Iraq is OPEC’s biggest producer after Saudi Arabia. The minister said he expects OPEC and its allies to increase production by 400,000 barrels next month. He added that the emergence of the omicron coronavirus variant hasn’t had much impact on global oil demand.
OPEC+, led by Saudi Arabia and Russia, decided early this month to raise output in January by that amount. But it kept its meeting “in session,” meaning that the alliance can change its plan rapidly if oil-market conditions deteriorate.
Other highlights from the minister’s comments:
- Iraq is working to create a sovereign fund that aims to finance energy projects in the country to cut down imports
- Iraq plans to capture all associated gas flaring, which ranges between 4 billion to 5 billion standard cubic feet per day
- Current gas capturing projects in Iraq are worth $7 billion
- Iraq in talks with Qatar to import gas via pipeline and also to invest in any gas-pipeline project from Qatar to Kuwait
- Iraq set to award front-end engineering designs or FEED work to the U.S.; KBR Inc. is part of TotalEnergies SE’s gas-capturing deal signed in September
- Iraq is currently rehabilitating its export pipeline to Ceyhan that was damaged by ISIS, and is now 85% complete
- On climate change, Iraq is committed to switching all liquid fuels used for power plants to gas
