The Iraqi government has approved the nationalization of oil production in the West Qurna 2 oil field, which is a concession of Lukoil, in accordance with the terms of the contract with the Russian company, the National newspaper reported, quoted by BTA.
The cabinet has decided to seek approval to finance its activities through the Majnun oil field account, which will be funded with proceeds from crude shipments sold by the State Oil Sales Organization.
The Iraqi Ministry of Oil will take over the management of West Qurna 2 to prevent potential production disruptions due to sanctions against “Lukoil“. The Russian energy giant declared force majeure at its largest facility in November last year after new US and UK sanctions hampered its work in Iraq.
After the sanctions, “West Qurna 2“ attracted the interest of a number of investors, including the US “Exxon Mobil“ and “Chevron”.
Output at “West Qurna 2“, which is one of the world's largest fields, has remained stable at levels of 465,000 to 480,000 barrels per day. The field provides about 0.5 percent of global oil supplies and 9 percent of total output in Iraq, the second-largest producer in OPEC after Saudi Arabia.