Iraq faces the urgent task of finding a replacement for Russia’s Lukoil at the West Qurna 2 oilfied, one of the country’s largest, to prevent a sharp fall in crude exports, analysts say.
According to a news report by Zawya, Lukoil, Russia’s second-largest oil producer, appears ready to exit West Qurna 2 following U.S. sanctions aimed at pressuring Moscow over the Ukraine conflict. Last month, Lukoil reportedly accepted an offer from Switzerland-based Gunvor Group to purchase its international subsidiary, which has operations in countries including Iraq, Azerbaijan, Kazakhstan, Uzbekistan, Egypt, Cameroon, Nigeria, Ghana, Mexico, the UAE, and the Republic of the Congo.
Lukoil holds a 75% stake in West Qurna 2, with the remainder controlled by Iraq’s state-owned South Oil Company. “Should Lukoil quit the field and production be halted, this will deprive Iraq’s crude oil exports of 450,000–500,000 barrels per day,” an unnamed Iraqi official told Aliqtisad news.
Analysts view Lukoil’s move as a geopolitical win for Western powers. Nabil Al-Marsouimi, an energy sector expert, noted that the withdrawal could create opportunities for Western firms such as ExxonMobil, BP, and TotalEnergies to strengthen their presence in Iraq. ExxonMobil, which previously operated nearby West Qurna 1, has signed a heads of agreement with Baghdad for the development of the Majnoon oilfield and is considering a return to Iraq.
Iraqi experts highlight that the government cannot absorb Lukoil’s 75% stake, making a foreign replacement essential. Chinese firms, including PetroChina, are also strong contenders given their extensive existing operations in Iraq. PetroChina already operates West Qurna 1, making it a likely candidate to take over Lukoil’s operations at West Qurna 2.
The Iraqi oil ministry has condemned Lukoil’s force majeure declaration as illegal. Ali Al-Shatri, director general of the State Oil Marketing Organisation (SOMO), stated that “the declaration is against the law because it is unilateral…the Iraqi oil ministry has not made a similar declaration although it is party to the agreement with Lukoil.” He added that Iraq could temporarily manage production at West Qurna 2 or hand the field to another foreign company already operating in the country.