U.S. oil major Chevron is pressing Iraq to improve returns on the giant West Qurna 2 oilfield as a condition for acquiring the project from Russia’s Lukoil, Reuters reported citing three sources familiar with the matter.
Earlier this month, Iraq nationalized the field after U.S. sanctions imposed on Lukoil over Russia’s war in Ukraine made it difficult for the company to operate its international assets, including West Qurna 2. Lukoil has until February 28 to divest the asset under the sanction’s regime.
West Qurna 2 is one of the world’s largest oilfields, accounting for about 0.5% of global oil supply and nearly 10% of Iraq’s output. Days after the nationalization, Iraq’s oil minister confirmed talks were under way with Chevron.
The sources added that Chevron and Iraq’s oil ministry are negotiating improved contractual terms, according to the sources, with any agreement requiring cabinet approval. Chevron declined to comment on commercial matters, saying it continues to assess global opportunities and operates in compliance with applicable laws. Iraq’s oil ministry said negotiations were ongoing, with several details still under discussion.
According to the sources, Chevron and Iraq’s oil ministry are negotiating improved contractual terms, with any agreement requiring cabinet approval. Chevron declined to comment on commercial matters, saying it continues to assess global opportunities and operates in compliance with applicable laws. Iraq’s oil ministry confirmed negotiations were ongoing, with several details still under discussion.
A deal would deepen Chevron’s presence in Iraq, following its agreement to develop several fields in the country as part of its international expansion after completing its $53 billion acquisition of U.S. producer Hess in 2025.
Iraq, the world’s seventh-largest oil producer, has revised contract terms over the past two years to attract investment, shifting from service contracts to profit-sharing agreements. Lukoil’s West Qurna 2 project was developed under the earlier service-contract model, which industry sources say delivers among the lowest returns in Iraq.
Iraq’s crude output has risen to more than 4 million barrels per day (bpd) in 2025, up from around 2.5 million bpd before the 2003 U.S. invasion, though it remains below post-war targets of 9–12 million bpd.
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