Exxon Mobil Corp. said Thursday it is selling stakes in its West Qurna-1 oil project in Iraq to PetroChina and PT Pertamina (Persero) of Indonesia.
PetroChina will take 25% and Pertamina a 10% stake.
The West Qurna-1 field near Basra in southern Iraq is one of several big fields that Western oil companies agreed in 2010 to help Iraq develop, the Wall Street Journal said.
“After selling the stakes, Exxon will retain 25% of the field and continue as its operator. The rest of the field is owned by Royal Dutch Shell PLC and Iraq’s state-owned South Oil Co.,” the Journal said.
China has doubled its crude imports from Iraq since 2009.
“Simon Powell, head of Asian oil-and-gas research at CLSA Asia-Pacific Markets, said the deal could be valued at as much as $5 billion, based on the field’s reserves and a contract of at least 10 years,” according to the WSJ.
The West Qurna-1 field has the potential to produce nearly three million barrels of crude a day. The field is now producing just over 500,000 barrels a day.
The field may hold 43 billion barrels (6.8×109 m3) of recoverable reserves, making it the second largest field in the world after Saudi Arabia’s Ghawar oil field. The field was closed to Western firms due to years-long sanctions.
The development project could cost up to $50 billion. PetroChina has said it aimed for overseas production to account for half its business by 2015. PetroChina and its parent, state-owned China National Petroleum Corp., since 2009 have spent $37 billion buying overseas oil-and-gas assets, according to data provider Dealogic.
China’s increased activity in Iraq reflects Beijing’s willingness to obtain assets in higher-risk locations. Concerns over Chinese energy companies’ ties to the Chinese government have limited their ability to obtain new and unconventional oil-and-gas resources in North America.