UPDATE 1-Exxon to sell over half of Iraq oilfield stake to PetroChina, Pertamina-Iraq minister

Fri Aug 23, 2013 6:12am EDT

Related Topics

* Exxon selling 25 pct to PetroChina, 10 pct to Pertamina - Iraqi oil minister

* Deal maybe done after two to three weeks - minister

NEW DELHI Aug 23 (Reuters) - Exxon Mobil is selling over half of its 60 percent holding in Iraq's West Qurna-1 oilfield project to China's biggest energy firm PetroChina and Indonesia's Pertamina, Iraq's oil minister confirmed on Friday.

"25 percent (stake) to PetroChina and 10 percent to Pertamina," Abdul Kareem Luaibi told Reuters on the sidelines of a ministerial meeting here.

Company and industry sources said on Thursday that China and Indonesia were set to join Exxon Mobil's $50 billion project to develop the field.

U.S. oil major Exxon Mobil is the operator of the giant oilfield and last year had offered to sell its entire stake after a dispute with Baghdad over contracts it signed with autonomous Kurdistan, deals which the central government rejects as illegal.

It later committed to further investment at the field - now pumping just under 500,000 barrels a day - and stepped back from making a full exit.

Luaibi added that the deal would be done "maybe after two to three weeks".

PetroChina could not immediately be reached for comment. The company had confirmed it was in talks for a stake in West Qurna-1 at its interim results briefing this week.

Indonesia's chief economic minister Hatta Rajasa said in March that Pertamina was negotiating a 10 to 20 percent stake.

Industry sources say for Exxon, a final agreement is contingent on getting better terms for its technical service contract at West Qurna-1. Baghdad has offered to sweeten the deal, the sources say, though there are no details.

Tough terms and slim margins on Iraq's service fee contracts are drawbacks to investment in southern Iraq and hopes are that the terms can be moulded closer to the Kurdish production-sharing contract.

FILED UNDER: