One of the massive oil fields in the world – west Qurna in Iraq is known for the oil reserves as it holds jaw-dropping 43-billion barrels. With so much chaos that occurred due to the pandemic and economies stabilizing slowly, the uneven pace in oil prices which slumped with a shocking production cut by OPEC and its allies accelerated the drop. Now that the price is stabilizing Iraq considers producing 8 million barrels per day (bpd) by 2029 which is double the present production which is 3.8 million bpd due to the OPEC instructions.
As the country has abundant resources the plans can be attained enabling it to surpass Saudi Arabia which has been producing approximately 8.17 million bpd from 1973 until the current year. To have a proper supply of recovery reserves to the market from the largest oil fields in Iraq continuous investment will be required.
To attain the target the country has announced initiatives in the last week about increasing the production and also buying the stakes in ExxonMobil’s oil fields. This sale is considered to have an impact on the economic rebound for the country and Exxon can restructure the finances to lower the accumulated debts of last year.
The oil ministry of Iraq mentioned that it is planning to discuss buying a 32.7% stake of Exxon in a major oil field near Basra city. The lead contractor Exxon’s strategy to sell the asset would reduce the financial burden of over $70 billion debt and defend its $15 billion dividends yearly. With the green shoots that are seen with the increase in Brent crude oil which is higher than $66 a barrel, at least $500 million can be expected from Exxon’s stake. In a way to regain financial strength, Exxon has cut down on the capital expenses until 2025 by $10 billion a year. This move of Exxon is to improve the Permian Basin and the Guyana projects.
Other owners of the portions in the oil field are, PT Pertamina with 10%, PetroChina with a 32.7% stake, and Japan’s Itochu Corp. with 19.6%.
OPEC with the allies seems confident about the stability of prices with better demand for energy even though the Covid-19 impact is still seen with a surge in virus cases in India which is the third-largest oil importer.