* Decision on replacement for Exxon expected by mid-2013
* Shahristani urges OPEC members to observe production
* Comfortable with oil prices around $100 per barrel
By Simon Falush
LONDON, Nov 13 Exxon Mobil is in the
advanced stages of talks with potential buyers to take on Iraq's
West Qurna 1 oilfield and there are enough appropriate
candidates, the country's deputy prime minister for energy said.
"A decision will have to be made shortly. To transfer the
assets will take some time, but it will be sooner (than the
middle of next year)," Hussain al-Shahristani told Reuters on
"There are sufficient number of interested buyers with the
financial resources and the technical know-how to buy their
interest," Shahristani earlier told reporters.
Exxon Mobil, which has signed oil deals in Iraq's
autonomous Kurdistan region that are seen as more lucrative but
dismissed by the central government as illegal, has informed the
Iraqi government it wants to pull out of the $50 billion West
Qurna 1 project in southern Iraq.
Uncertainty over who can replace the U.S. oil major in the
important project have raised questions about Iraq's target to
increase crude output to 5-6 million barrels per day by 2015
from 3.4 million bpd.
Shahristani told reporters on the sidelines of the Oil and
Money conference in London that Exxon would soon hand over the
field to a company that had the capabilities to exploit it.
He declined to say how many companies there were involved in
the process or to identify their country of origin.
"Exxon Mobil has already specified deadlines to submit the
bids and as soon as they receive their bids, there is more than
one interested qualified buyer," he said.
"As soon as (Exxon) make a request to us to allow them to
sell the interest to that buyer, then it will be known how long
it will take them to finalise the arrangements. We have already
agreed with Exxon on the timetables to finalise the
arrangement," he added.
Some industry sources have said Baghdad is keen to replace
Exxon with companies from Russia or China. But it was unclear
which companies would have the financial heft to follow Exxon.
Russia's second largest crude producer Lukoil said
on Friday it would study an offer from Exxon to take over West
Qurna-1, Interfax news agency said.
Lukoil, which is already developing West Qurna-2, has
previously said West Qurna-1 is "too big for it to swallow", but
on Friday it said it would at least look into the proposal.
Turning to OPEC policy matters, Shahristani said some
members of the Organization for Petroleum Exporting Countries
should cut their current levels of production.
"The total quota for OPEC is 30 million barrels per day,
OPEC is producing 31 million bpd, so there are some members
overproducing their quotas. We are calling, and some other
members are calling, for the quotas to be observed," he said.
"There is no need for overproduction, the market is
well-supplied, prices are stable, there is no great demand, so
there is no need to over-produce," Shahristani added.
He said he was comfortable with oil prices around present
levels. Benchmark Brent crude was trading on Tuesday
near $108 a barrel.
"The current price around $100 per barrel is one which will
encourage investors to keep on developing marginal fields and
it's a price that will not impact economic development in the
rest of the world."
(Reporting by Simon Falush; Additional reporting by Alice
Baghdjian; Editing by Anthony Barker)