Crude flow from Lukoil’s West Qurna-2 storage tanks has resumed toward the major Tuba depots after a weekend shutdown, two energy sources told Quantum Commodity Intelligence. Full field operations are expected to be restored between 1 a.m. and 2 a.m., following a precautionary halt triggered by a pipeline leak.
West Qurna-2 is one of the world’s largest oilfields, producing roughly 460,000 barrels per day and holding an estimated 13 billion barrels of recoverable reserves—about 10% of Iraq’s total output. Lukoil operates the field with a 75% stake, while the Iraqi government owns the remainder. The temporary outage raised concerns due to the field’s strategic importance, but officials now say the issue has been resolved and flows are returning to normal.
The oilfield has been under force majeure since November after sanctions by the U.S. and UK disrupted operations. Last month, Baghdad transferred operational control of the West Qurna 2 oilfield to Basra Oil Company and Maysan Oil Company.
Last month, the U.S. Treasury issued the greenlight for companies to begin talks with Lukoil for its foreign assets, with U.S. oil and gas giants Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) have already expressed interest. Exxon is in talks with Iraq’s Oil Ministry to buy Lukoil’s 75% stake in the West Qurna 2 oilfield, one of the country’s largest. Iraq’s oil ministry has invited several U.S. oil companies to enter negotiations over the West Qurna 2 takeover through a competitive bidding process. West Qurna-2 oilfield produces more than 400,000 bpd of crude. The Iraqi government has taken over operations at West Qurna 2, including paying staff salaries directly.
Previously, Lukoil reached a preliminary agreement with Gunvor to buy its international assets. However, the giant commodity trader pulled the $22-billion bid after the U.S. Treasury Department expressed dissatisfaction with the deal, calling Gunvor a Russian “puppet”.
Unfortunately, the latest round of peace talks between Russia and Ukraine have been unfruitful after the Kremlin failed to agree to Trump’s 19-point peace plan. Some of the critical amendments in the new plan include no handover of the Donbas region to Russia for free, no automatic veto on Ukraine joining NATO in the future and provision of Article 5-style protection for Ukraine, meaning the U.S. would be bound to intervene if Russia invades in the future. A proposal for full amnesty for war crimes that was part of the first plan has also been removed.
By Alex Kimani for Oilprice.com
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