China willing to join Exxon at giant Iraq oilfield

Tue Mar 5, 2013 10:52am EST
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By Chen Aizhu

BEIJING (Reuters) - China is willing to join Exxon Mobil in a giant Iraqi oilfield project, a top executive said on Tuesday, which could see Beijing come to dominate Iraq's oilfields and help the U.S. major mend fences with Baghdad.

Last year, Exxon (XOM.N: Quote) offered to sell its stake in the southern Iraq West Qurna-1 oilfield after fighting with Baghdad over contracts it has signed with autonomous Kurdistan in the north, deals the central government rejects as illegal.

By the end of December, the China National Petroleum Corp (CNPC) had emerged as the frontrunner to take over Exxon's 60 percent share.

But now Iraqi Prime Minister Nuri al-Maliki is working to keep the U.S. oil giant on side, industry sources say, offering much sweeter terms at West Qurna-1 - a $50 billion investment project and a greater potential prize than the Kurdish blocks if Baghdad structures the contract closer to the more lucrative Kurdish model.

Exxon is setting up a range of options, the sources say, including the possibility of selling just part of its 60 percent stake in West Qurna-1 to PetroChina (0857.HK: Quote) (601857.SS: Quote), the listed arm of CNPC.

Jiang Jiemin, PetroChina's Chairman, told Reuters that China's largest oil and gas producer is prepared to team up with Exxon at the field, now pumping in excess of 400,000 barrels per day (bpd).

"We are willing to jointly develop the project with Exxon Mobil. Exxon Mobil welcomed our participation and the Iraqi government also supports us joining the development," Jiang said on the sidelines of the annual parliamentary session in Beijing.

He said PetroChina would "thoroughly evaluate the project" and make an investment decision at an "appropriate" time.   Continued...

The Belgian headquarters of oil giant ExxonMobil, where Britain's Nicholas Mockford worked, is pictured in Machelen, northern Brussels, October 27, 2012. REUTERS/Sebastien Pirlet