US oil giant Chevron has announced it is in exclusive negotiations to acquire a stake in one of the largest oilfields in the world, following sanctions on Russian company Lukoil.
Pending approval from both the US and Iraq governments, Chevron aims to negotiate for an undisclosed portion of the West Qurna 2 field, which currently produces close to 500,000 barrels of crude oil each day. This accounts for about 10% of Iraq’s total oil output.
Previously, Lukoil owned three-quarters of this field but has been forced into selling its international assets due to sanctions imposed last October. Earlier this year, US private equity firm Carlyle reached a preliminary agreement to take over Lukoil’s overseas portfolio.
The sanctions quickly disrupted operations at West Qurna, leading Lukoil to declare force majeure and halt several shipments as it found itself unable to manage payments effectively. Now, Iraq’s state-run Basra Oil Company has taken over operations and will negotiate terms with both Lukoil and Chevron regarding the latter’s entry into the field.
Iraq has been proactively seeking US oil companies to invest in key energy projects. This move not only aims to boost foreign investment but also signals a desire to strengthen ties with the US, especially in light of pressure from the Trump administration for Iraq to reduce its connections with Iran.
Earlier this month, Chevron also signed an agreement for offshore oil exploration in Syria after extensive discussions facilitated by US officials. Washington has been actively encouraging US energy firms to explore opportunities in Syria, especially after sanctions were eased last year.
Chevron’s close relationship with the Trump administration has positioned it to benefit significantly from these geopolitical shifts. The company has also been involved in production efforts in Venezuela, where it remains the only major US oil company with operations. As a result, Chevron’s stock has surged nearly 21% since the beginning of the year, aligning its performance closely with that of ExxonMobil.