(Bloomberg) – ExxonMobil signed agreements that lay the groundwork for it to explore Iraq’s giant Majnoon oil field, ending the company’s near two-year hiatus in the country.
The Texas oil major has signed heads of agreements with Basra Oil Co. and SOMO, Iraq’s oil marketing company, the nation’s Prime Minister Mohammed Shia Al-Sudani said Wednesday. Goal include developing the Majoon oil field and boosting Iraq’s export infrastructure, his office said. The agreement includes a joint cooperation with SOMO to explore marketing opportunities, it said.
On Tuesday, Exxon said in a statement it was in advanced discussions with the country’s oil ministry “as we routinely look at opportunities to optimize our advantaged portfolio.”
Exxon was among the first Western oil explorers allowed into Iraq, the second-largest producer in OPEC, in 2010 as the nation sought to rebuild its energy industry in the aftermath of the country’s invasion, fall of President Saddam Hussein and the years of conflict that followed. But the company decided to exit its primary investment — a stake in the West Qurna-1 oil field in southern Iraq — in early 2024 amid tough contractual terms, OPEC supply constraints and ongoing political instability.
Majnoon, also in the south of Iraq, is one of the country’s biggest fields and has long attracted the interest of the world’s largest oil companies. But profit sharing with the government has often been a source of conflict, one that led Shell Plc to quit the field in 2017.
Exxon will need to complete a series of commercial and technical studies and agree to an operating contract before oil production could begin, a process that could take years.
Water supplies have also been a concern historically, as many of Iraq’s wells rely on injection of fluids to sustain reservoir pressure.
