Chevron has gained exclusive negotiation rights for one year to finalize the operational takeover of Iraq’s West Qurna 2 oil field, which was previously controlled by Russian firm Lukoil. The arrangement involved a USD200 million advance on a prospective signing bonus, according to sources with knowledge of Iraq’s Oil Ministry.
This development is part of a broader U.S. strategic effort to reassert influence in Iraq through multiple initiatives. Earlier this year, Chevron signed preliminary agreements covering development of the Nasiriyah supergiant field, four exploration blocks in Dhi Qar province, and the Balad oil field in Salahaddin province. The push to secure West Qurna 2 follows the application of enhanced U.S. sanctions targeting Russian oil entities including Lukoil and Rosneft, which collectively were exporting approximately 3.1 million barrels per day before these measures took effect.
Iraq holds substantial energy reserves that make it strategically valuable to both Western and Eastern powers. The country contains an estimated 145 billion barrels of proven crude oil reserves, along with approximately 3.5 trillion cubic metres of natural gas reserves. Extraction costs in Iraq are among the lowest globally at USD1-2 per barrel. Beyond resource wealth, Iraq’s geographical position at the heart of the Middle East—bordering Iran, Kuwait, Saudi Arabia, Jordan, Syria, and Turkey—grants it significant regional influence and access to Mediterranean markets.
Recent years have witnessed major shifts in foreign control over Iraqi energy infrastructure. Chinese companies have gained control over approximately 34 percent of Iraq’s proven reserves and two-thirds of production capacity, primarily in southern regions. Russia had established substantial influence over northern Iraqi oil infrastructure until sanctions prompted operational withdrawals by major Russian firms. The Western effort to regain operational control must contend with governance challenges, as Iraq has historically ranked among the world’s most corrupt nations according to international assessments.
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