Iraq has the world's third-largest oil reserves, behind Saudi Arabia and Iran, with an estimated 115 billion barrels
A technician walks close to a flare at the North Rumaila oil field in southern Iraq. Iraq's income from oil sales jumped by nearly 60 percent in 2011 compared to the previous year on the back of higher crude prices and increased exports, according to figures released by the oil ministry. © Essam -al-Sudani - AFP/File
Iraq has the world's third-largest oil reserves, behind Saudi Arabia and Iran, with an estimated 115 billion barrels
AFP
Last updated: February 2, 2012

Iraq oil minister assents to Statoil-Lukoil sale

Iraq's oil minister has given his assent for Norway's Statoil to sell its stake in the massive West Qurna-2 field in south Iraq to Russia's Lukoil, an oil ministry official said on Thursday.

However, a spokesman for Statoil said the company had not sold its stake.

"The minister (Abdelkarim al-Luaybi) agreed that Statoil will sell its share to Lukoil, but we didn't receive any details on this transaction," the official said.

The two firms hold a combined 75 percent share -- Lukoil 56.25 percent and Statoil 18.75 -- while Iraq's North Oil Company holds 25 percent.

When asked by AFP if Statoil had sold its West Qurna-2 stake, Statoil spokesman Baard Glad Pedersen said that it had not.

"We are partners on the West Qurna-2 project with Lukoil," Pedersen said, adding that Statoil does not comment on speculation about adjustments to its portfolio.

The deal, for a period of 20 years that can be extended by five years, was signed in early 2010, following an initial agreement in December 2009. The companies receive fees of $1.15 per barrel extracted.

According to the terms of the deal, Lukoil and Statoil were aiming to raise production at the field in southern Iraq to 1.8 million bpd.

"It is not clear what exactly is motivating Statoil to look to leave West Qurna-2," the Middle East Economic Survey (MEES) said last month.

"But it is hard to escape the conclusion that if all was going well in Iraq, Statoil would not be seeking to divest from its strategic 18.75 percent stake in West Qurna-2," it said.

Iraq's income from oil sales jumped by nearly 60 percent in 2011 compared to the previous year on the back of higher crude prices and increased exports, according to oil ministry figures.

Oil sales account for the vast majority of Iraq's government income and around two-thirds of gross domestic product.

The country is looking to raise its production by around 500,000 bpd this year, upping average daily exports to around 2.6 million bpd, according to the oil ministry.

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