The Iraqi government has approved plans to nationalize the West Qurna-2 oil field, owned by Russian company Lukoil, Reuters reported, citing representatives of the state-owned Basra Oil Company.
According to sources, the decision to nationalize the field was made to prevent operational disruptions caused by US sanctions. Basra Oil Company will assume management of the asset.
“We are committed to ensuring uninterrupted production while Iraq experiences uncertainty related to US sanctions and will seek potential buyers for Lukoil’s stake within 12 months. Basra Oil Company will cover local staff salaries, operating expenses, and subcontractor payments using an account linked to the Majnoon oil field to simplify the process,” a company representative explained.
Lukoil declared force majeure at the West Qurna-2 field in November. The reason for this was US sanctions imposed by President Donald Trump. About a dozen investors submitted bids to purchase the company’s assets, including American oil giants Exxon Mobil and Chevron, as well as the private equity firm Carlyle.
The Russian company announced its intention to sell its foreign assets after being placed on the US Specially Designated Non-Profit Organization (SDN) List on October 22, which carries the most stringent restrictions.
Currently, production at West Qurna-2 remains stable, between 465,000 and 480,000 barrels per day. The government is seeking permission to finance operations through the Majnoon oil field account using revenues from crude oil sales by state-owned oil trader SOMO.
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