On January 1, local time, Iraq held a handover ceremony for the lead contractor of the West Qurna 1 oil field. China National Petroleum Corporation (CNPC) officially succeeded the U.S. oil giant ExxonMobil as the lead contractor of the oil field and is also the largest shareholder.
Source: PetroChina official WeChat
Lead contractor means that when an oil field project is very important and complex, several partners (big oil companies) will participate as a consortium. However, there will be a "big brother" in the consortium, that is, the lead contractor. When there are important matters that require a statement or a major decision that requires voting, the lead contractor's act of signing a contract with the tenderer is equivalent to all parties in the consortium signing a contract with the tenderer.
The handover ceremony was held in Basra Province in southern Iraq. Officials from both China and Iran, as well as representatives from PetroChina, Basra Oil Company, Exxon Mobil and other companies attended the handover ceremony.
In addition, ExxonMobil also signed a "purchase and purchase agreement" with Iraq's state-owned Basra Oil Company to sell its last remaining upstream oil and gas assets in Iraq to the latter.The deal also marks the U.S. company's official exit from Iraq's oil and gas market.
The West Qurna Phase 1 oil field is located about 50 kilometers northwest of Basra. It is one of the largest oil fields in Iraq, with an estimated annual crude oil production of more than 25 million tons. The oil field is also one of the largest in the world, with estimated recoverable reserves of more than 20 billion barrels.
"Iraq and PetroChina plan to increase the production of the oil field to 600,000 barrels per day by the end of 2024."Basim Mohammed, Deputy Minister of Upstream Operations at the Ministry of Petroleum of Iraq, said.
Battle for equity in West Qurna Phase 1 oil field
As one of the world's largest oil fields, the West Qurna Phase 1 oil field has attracted the favor of many oil giants.
In 2010, ExxonMobil, Shell and the Iraqi state-owned Oil Exploration Company (OEC) jointly won the development rights to the West Qurna Phase 1 oil field. However, at the end of 2013, ExxonMobil sold its shares to PetroChina (25%) and Pertamina Indonesia (10%).
Shell also sold all 19.6% of its shares to West Qurna Limited 2, a subsidiary of Japan's Itochu Petroleum Development Co., Ltd. (CIECO), for US$406 million in 2018.
Subsequently, Indonesia's National Petroleum Corporation and Basra Petroleum Company purchased ExxonMobil's 10% and 22.7% shares in the oil field respectively.
As a result, the shareholders of the oil field development company include PetroChina, Iraq's Basra Oil Company, Japan's Itochu Corporation, Indonesia's National Petroleum Company and Iraq's Petroleum Exploration Company, of which PetroChina holds the largest share.