Exxon to exit 25% stake in Iraq oilfield to PetroChina

November 28
5:30 AM 2013

American oil giant Exxon Mobil will hand over its 25% stake in Iraq's West Qurna-1 oilfield project to PetroChina on Thursday, the Iraqi deputy prime minister for energy said. PetroChina is the largest energy company in China.

According to a report by Reuters, the government of Iraq in August said Exxon was selling over half of its 60% holding in the field. Aside from the stake going to PetroChina, Iraqi officials said another 10% is expected to be sold to Indonesia's Pertamina. 

Reuters said Exxon offered to sell its entire stake in the giant oilfield following a dispute with the government of Baghdad over contracts it signed with Kurdistan. The said deals signed with Iraq's autonomous region were rejected by the country's central government as illegal. Exxon later committed to further invest in the field and aborted its earlier plan to make a full exit. Tough terms and slim margins on Iraq's service-fee contracts were drawbacks to investment in southern Iraq, the report said. 

In a statement, Iraq's Hussain al-Shahristani said he had met with PetroChina's Wang Shali on Wednesday. Meanwhile, Shali said her company and Exxon will sign the final agreement on Thursday, Reuters reported. 

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