Exxon Mobil Corp. is considering re-entering Iraq after a nearly two-year hiatus by signing agreements that would lay the groundwork to explore the country’s giant Majnoon field.
The Texas oil major plans to sign a heads of agreement with Basra Oil Co. and SOMO, Iraq’s oil marketing company, in the coming days, according to a person familiar with the matter. The deal will include talks over export infrastructure and potential oil marketing projects in the south of the country, said the person, who asked not to be named because the information is private.
“Exxon Mobil is in discussions with the Iraqi Oil Ministry as we routinely look at opportunities to optimize our advantaged portfolio,” the company said in an emailed statement. The Iraqi embassy in Washington DC didn’t immediately respond to a request for comment.
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 would need to complete a series of commercial and technical studies and agree to a production-sharing 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.
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