* Exxon options include selling part of its stake to
* West Qurna-1 involvement would cement China's major Iraq
* PetroChina chairman: decision at "appropriate" time
By Chen Aizhu
BEIJING, March 5 China is willing to join Exxon
Mobil in a giant Iraqi oilfield project, a top executive said on
Tuesday, which could see Beijing come to dominate Iraq's
oilfields and help the U.S. major mend fences with Baghdad.
Last year, Exxon offered to sell its stake in the
southern Iraq West Qurna-1 oilfield after fighting with Baghdad
over contracts it has signed with autonomous Kurdistan in the
north, deals the central government rejects as illegal.
By the end of December, the China National Petroleum Corp
(CNPC) had emerged as the frontrunner to take over Exxon's 60
But now Iraqi Prime Minister Nuri al-Maliki is working to
keep the U.S. oil giant on side, industry sources say, offering
much sweeter terms at West Qurna-1 - a $50 billion investment
project and a greater potential prize than the Kurdish blocks if
Baghdad structures the contract closer to the more lucrative
Exxon is setting up a range of options, the sources say,
including the possibility of selling just part of its 60 percent
stake in West Qurna-1 to PetroChina , the
listed arm of CNPC.
Jiang Jiemin, PetroChina's Chairman, told Reuters that
China's largest oil and gas producer is prepared to team up with
Exxon at the field, now pumping in excess of 400,000 barrels per
"We are willing to jointly develop the project with Exxon
Mobil. Exxon Mobil welcomed our participation and the Iraqi
government also supports us joining the development," Jiang said
on the sidelines of the annual parliamentary session in
He said PetroChina would "thoroughly evaluate the project"
and make an investment decision at an "appropriate" time.
"The asset value of the whole project is massive, but
near-term capital spending required is not that huge," said
Jiang, adding that parties have yet to discuss the size of
stakes to be shared.
A source familiar with PetroChina operations in Iraq said
the two companies were discussing a deal that would enable Exxon
to retain operator status at the oilfield, where Royal Dutch
Shell is minority partner with 15 percent.
CNPC made a play for Exxon's full stake in West Qurna-1 at
the end of last year, but the U.S. company was not satisfied
with the bid, according to industry sources.
Asked if PetroChina is aware of Baghdad trying to keep Exxon
in the project, Jiang said: "Iraq has its own bottom lines. If
Exxon continues with its new projects in the Kurdistan region,
its operations in Iraq will face some difficulties".
Exxon was the first major oil company to sign agreements
with the government of the autonomous Kurdistan region, a move
that increased tension between Baghdad and the Kurds in a
long-running dispute over oil, territory and political autonomy.
Baghdad says any deals signed with Kurdistan are illegal,
but the government of Kurdistan says the constitution allows it
to sign oil agreement without permission from the central
PetroChina, the first foreign oil company to sign an oil
service deal in Iraq after the toppling of its former president
Saddam Hussein, already has a formidable position in Iraq's
prized southern oilfields.
It is in charge at Halfaya and partners BP at
Rumaila, Iraq's biggest oilfield.
Iraq has the world's fourth largest oil reserves and wants
to at least double it production in the next few years. Now
pumping just over 3 million bpd, it ranks as the second biggest
producer behind Saudi Arabia in the Organization of the
Petroleum Exporting Countries.