Iraq Has Decided To Nationalize The Lukoil Field

"West Qurna-2" is the largest foreign asset of the Russian company.

The Iraqi government has approved the decision to nationalize the operator of the West Qurna-2 oil field, 75% of which belongs to Lukoil. This is reported by Reuters. Management of the field for the next 12 months will be taken over by state-owned Basra Oil, two sources in the industry told the agency.

One of Basra Oil's representatives explained that the move is aimed at ensuring uninterrupted oil production amid the uncertainty associated with US sanctions. Within a year, the Iraqi side plans to find potential buyers for Lukoil's stake in the project.

West Qurna-2 is considered one of the largest oil fields in the world. It provides about 0.5% of global oil supplies and about 9% of Iraq's total oil production. In November, Lukoil declared force majeure at the facility after Iraqi authorities suspended payments to the company both in cash and oil.

According to U.S. requirements, the Russian company must get rid of foreign assets by January 17. This deadline was set after sanctions were imposed on Lukoil and Rosneft in late October.

Lukoil received a license to develop the West Qurna-2 field in 2009, and commercial oil production there began in 2014.

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