Iraq to nationalize Russian-run West Qurna 2 oilfield

BAGHDAD, Iraq (MNTV) — Iraq’s cabinet has approved the nationalization of petroleum operations at the West Qurna 2 oilfield, one of the world’s largest, citing concerns over sanctions affecting Russia’s Lukoil.

The decision follows a service contract previously signed with Lukoil and is intended to prevent potential disruptions to crude production, government officials said.

Under the move, Iraq’s state-owned Basra Oil Company will assume responsibility for day-to-day operations at the field, including the payment of local staff salaries, operational costs and obligations to subcontractors.

Funding for the takeover will be provided through an account linked to the Majnoon oilfield, which will be replenished using proceeds from crude shipments marketed by the State Organization for Marketing of Oil, officials said.

An oil manager at the West Qurna 2 field said production remains stable at between 465,000 and 480,000 barrels per day despite recent operational uncertainty.

Officials at the Oil Ministry said the takeover followed Lukoil’s declaration of force majeure in November after the company was hit by U.S.-led sanctions alongside Rosneft as part of Washington’s efforts to pressure Moscow over the war in Ukraine.

The sanctions have reportedly attracted interest from around a dozen potential investors, including U.S. oil majors Exxon Mobil and Chevron, as well as private equity firm Carlyle.

Lukoil’s 75 percent operating stake in West Qurna 2 had been its largest foreign asset. The field accounts for about 0.5 percent of global oil supply and roughly 9 percent of Iraq’s total output, making it a key pillar of production for Opec’s second-largest producer after Saudi Arabia.