China’s state-owned oil and gas company, PetroChina is to replace US energy giant Exxon Mobil Corp as the lead contractor for Iraq’s West Qurna 1 oilfield, following a settlement agreement, whereby the latter will finalize its exit from the oilfield, according to a senior Iraqi oil executive.

Yesterday Reuters quoted the deputy manager of Basra Oil Co., Hassan Mohammed as saying, we studied the settlement agreement and the oil ministry with the Basra Oil Company believe that the best option is for Petrochina to become the lead contractor of West Qurna 1.

Huang Yongzhang, president of PetroChina Co., during a news conference in Hong Kong, China, on Thursday, Aug. 31, 2023 [Lam Yik/Bloomberg via Getty Images]

The Iraqi government has also signed a sale agreement arranging the financial issues to finalise the process of acquiring Exxon Mobil Corp’s stake in West Qurna 1 oilfield by state-run Basra Oil Co.

The sale agreement includes a commitment to resolve the tax value that Exxon must pay for selling its stake in the field.

Tax issue is not resolved yet and according to the sale agreement we have two options, either to reach a tax settlement or we resort to arbitration.

The news agency reported that two oil managers at the West Qurna 1 field confirmed the details of the settlement and sale agreement signed with Exxon.

Following Exxon’s exit from the oilfield – which is one of the world’s largest, the company will no longer have a presence in Iraq’s energy sector.

Earlier this year, Oil Price reported that although PetroChina bought a 32.7% stake in the field at around the same time as Exxon took its identically-sized stake in the field, China has long been the dominant partner in West Qurna 1.

This was achieved by dint of several under-the-radar deals that on paper were for ‘contract-only’ work related to various anodyne-sounding projects but together established total control for China over the field, at ExxonMobil’s expense.

Middle East Monitor / ABC Flash Point News 2023.

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12-11-23 20:38

Western business corps have no standing with military back up.

12-11-23 20:53

Is this the first act of defiance against the USA by Iraq ?–time will tell .
For a long time the USA controlled Iraqi industry and dictated terms -as well as paying some in power which adds up to corruption and not working in the interests of the population.

If so expect a reaction from the USA in some form of sanction or withholding payment to help the country . By removing the USA influence Iraq will be able to have closer ties with Iran which is against US foreign policy.

Reply to  Donnchadh
12-11-23 22:00

It sounds like a chain reaction is bound to occur, but this time on a larger scale, leading and pointing to the end of the evil capitalist empire, which only functions on a gunboat diplomacy kind of attitude. Like getting subsidies and tax breaks consuming most of the tax payers money, while getting glorified in Hollywood movies and mainstream media propaganda.

Reply to  IsraelFine
12-11-23 22:11

Evolution is based on incidents and accidents to improve?