PetroChina Co. agreed to buy a 25 percent stake in Iraq’s West Qurna 1 field from Exxon Mobil Corp.
The stakeholders in the field, which also include Royal Dutch Shell and Oil Exploration Co. of Iraq, own contracts to drill for oil. PetroChina’s interest will allow it to “achieve synergies with its other projects in Iraq” and “develop a larger and stronger presence in the upstream operations in the Middle East,” the Beijing-based company said in a statement. It didn’t disclose how much it’s paying for the stake.
West Qurna 1 is near the Rumaila field run by BP and China National Petroleum Corp., PetroChina’s state-owned parent. Exxon’s 60 percent stake in the field could be worth $3 billion, according to an August estimate by Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein.
“PetroChina has all the expertise in developing mature fields at a relatively low cost,” said Shi Yan, an analyst with UOB-Kay Hian Ltd. “They have several projects in the southern part of the country and collectively they can find a way to deploy their equipment and crew members more effectively.”
CNPC produces about 1.65 million barrels of oil a day from its Iraqi projects, the company said in October 2012. Exxon, the world’s biggest oil company by market value, planned to produce about 600,000 barrels of oil per day by the end of 2013, Madhi Abdul Razzak, head of the Joint Management Committee for the oilfield, said in March.
David Eglinton, Exxon’s Houston-based spokesman, didn’t immediately respond to an e-mail after hours seeking comment.
Iraq, home to the world’s fifth-largest crude reserves, is producing 3.3 million barrels a day and in August exported 2.58 million barrels a day, Deputy Prime Minister for Energy Affairs Hussain al Shahristani said in a September interview.
Export capacity will exceed 6 million barrels a day once four offshore plants are operating next year and terminals in the south are upgraded, he said.