According to the Observer, the American energy giant ExxonMobil has officially withdrawn from the Sigurna-1 oilfield project in Iraq, and the operation of the oilfield will be taken over by PetroChina, and a handover ceremony was held for this. The handover ceremony was attended by Iraqi Deputy Minister of Petroleum Hudayil, General Manager of PetroChina Sigurna Company Chen Mingzhuo, senior ExxonMobil officials and senior executives of Iraq's Basra Oil Company.
In an interview with the media, Hudayil affirmed PetroChina's capabilities and congratulated it on replacing ExxonMobil as the lead contractor for the West Gulna-1 oilfield. Hudayil said that Iran is full of confidence in the business capabilities and business standards of Chinese enterprises, and will actively promote the cooperation between PetroChina and other partners, and believes that the West Gurna-1 oilfield project will achieve greater success.
Chen Mingzhuo mentioned that the successful succession of the lead contractor marks the further deepening of the cooperation between PetroChina and the Iraqi Ministry of Oil, and also reflects the affirmation and trust of the Iraqi government and other international partners in PetroChina's capabilities. Chen Mingzhuo also stressed that PetroChina will give full play to its advantages in cost control and execution, provide important support for Iraq's production increase plan, increase the Iraqi government's crude oil revenue, expand more opportunities for upstream and downstream industries, bring a large number of jobs to local residents, and inject more impetus into China-Iran energy cooperation and promote the construction and development of the "Belt and Road".
The lead contractor mentioned by Hudayil and Chen Mingzhuo is a proper term in international cooperation projects, which generally refers to the participation of multiple parties in a project as a consortium, and one party needs to take the lead and be responsible, that is, the lead contractor. When there are important matters that need to be expressed, or major decisions need to be voted on, the act of signing a contract between the lead contractor and the tenderer is equivalent to the consortium parties signing a contract with the tenderer.
In layman's terms, PetroChina has become the "leading big brother" of the West Gulna-1 oilfield project, and its voice and influence are higher than others. In the future, the development of the West Gulna-1 oilfield cannot be said to be entirely decided by PetroChina, but the development direction and important decisions require the nod of PetroChina. In the West Gulna-1 oilfield project, PetroChina was able to become the lead contractor because it held a much larger stake than other partners. PetroChina holds a 32.7% stake in the West Gurna-1 oilfield, followed by Basra Petroleum 22.7%, Indonesia's National Oil Company 20%, Itochu 19.6% and Iraqi Petroleum Exploration Company 5%.
Prior to this, ExxonMobil was the sole shareholder of ExxonMobil in the West Gulna-1 oilfield project, holding 60% of the shares in the oilfield, and it was difficult for foreign companies to enter Iraq and cooperate with Iraq to develop oilfield projects. But since 2013, ExxonMobil has sold its shares to PetroChina, Basra Petroleum and other companies. In November 2023, ExxonMobil announced its withdrawal from the Iraqi market after selling its remaining stake to Basrah Oil.
At the macro level, ExxonMobil's withdrawal from the West Gulna-1 oil field should also be related to the changing geopolitical landscape in the Middle East. The decline of U.S. influence in the region has led to an external security environment that is extremely unfriendly to U.S. companies, not to mention the Iraqi armed forces, which have been targeting U.S. employees. ExxonMobil has been forced to halt oil production on several occasions due to attacks on employees and protests by local residents, which affects not only the company's interests, but also the Iraqi side.
It is also understandable why Hudayir made it clear in the previous agreement of understanding with ExxonMobil that it is in the interests of both parties when he was still interviewed. After the Iranian side changes the main partner to PetroChina, it will avoid a lot of unnecessary troubles. For PetroChina, it is also in its interest to dominate the West Gurna-1 field, one of the largest in the world, with more than 20 billion barrels of recoverable reserves and a steady stream of revenues.