(Investing.com)– signed an agreement with Iraq on Wednesday to help it develop its large Majnoon oilfield and expand its oil export infrastructure, marking a return to the country two years after leaving.
OPEC’s second largest producer is looking to draw back Western oil majors and increase output constrained by years of war, corruption and sectarian tensions.
Iraqi Prime Minister Mohammed Shia al-Sudani announced that a deal was signed with Exxon but included few details.
It will involve a profit-sharing agreement covering crude oil and refined products and plans to upgrade Iraqi oil export infrastructure in the south, according to four sources with knowledge of the matter.
Iraq’s state oil company SOMO will also sign an agreement with Exxon to secure storage capacity in the Asian market, the sources said.
SOMO and Exxon did not immediately respond to Reuters requests for comment.
Iraqi state news agency INA reported in September that SOMO was in advanced talks with Exxon over a possible agreement to secure storage capacity in Singapore using tanks owned by the U.S. oil major.
In the past two years, Iraq has signed agreements with oil majors that had previously left, including Chevron, France’s TotalEnergies and the UK’s BP.
Exxon was one of the first Western oil firms to enter Iraq to develop oil fields after the U.S. invasion in 2003. But it left the West Qurna project due to what sources described as poor returns.
It also tried to develop fields in Iraq’s semi-autonomous region of Kurdistan despite Baghdad’s ire but also left those projects due to what sources said were poor exploration results.
After exiting Iraq’s giant West Qurna 1 oilfield, Exxon transferred its remaining stake and operatorship to PetroChina, which became the lead contractor.
In September, Iraq’s federal government reached an agreement with the Kurdistan Regional Government (KRG) and international oil companies to resume crude exports through Turkey that were suspended in 2023.
That is expected to eventually return up to 230,000 barrels per day to international markets at a time when OPEC+ oil-producing countries are boosting output to gain market share.
