Iraq Nationalizes Operations in West Qurna 2 Oilfield Amid Sanctions on Lukoil

The Iraqi cabinet announced the nationalization of the West Qurna 2 oilfield, aligning with an agreement with Russia's Lukoil. The decision aims to continue operations despite sanctions on Lukoil. The nationalization process includes financing through the Majnoon oilfield and covering costs via the Basra Oil Company.

Iraq has taken a significant step by nationalizing its operations in the West Qurna 2 oilfield, aligning with a previously signed service contract with Russia's oil giant, Lukoil. This decision was confirmed by an official government statement released on Wednesday.

The move aims to mitigate potential production disruptions due to sanctions imposed on Lukoil, which had previously declared force majeure at the site. The Iraqi cabinet approved securing operational financing through the Majnoon oilfield account, supplemented by state oil marketer SOMO's crude shipment revenues.

Despite these challenges, production continues steadily, with the West Qurna 2 field contributing substantially to global and national oil supplies. Moreover, the sanctions have attracted interest from major investors, including Exxon Mobil and Chevron, seeking to capitalize on Lukoil's diminished operational stake.

(With inputs from agencies.)