Iraq Agrees Contract Terms With Chevron for West Qurna 2, Targets Signing Before End of 2026
Key Facts
Iraq’s Oil Ministry said Baghdad had reached agreements with Chevron on the terms of a development contract for the West Qurna 2 field, in a move aimed at completing the contract before the end of 2026. A World Oil report published on November 3 quoted the ministry’s announcement, noting that the contract is targeted for signing before year-end. Signing remains a subsequent step, as the announcement does not indicate that Chevron has taken over operation of the field or acquired a stake in it. The field was previously operated by Russia’s Lukoil, Reuters reported on the same day. Its output is about 460,000 barrels per day, according to the report, making the contract details relevant to a major field in Iraq’s oil sector.
The announced developments concern agreement on matters related to the development contract, while signing remains the next execution milestone Baghdad set before the end of 2026. The announcement did not confirm that the transfer of operations had been completed or that Chevron had begun managing production. According to a Shafaq News report, state-owned Basra Oil Company temporarily took over the field after Lukoil withdrew from operations, while Baghdad was negotiating a long-term arrangement with Chevron. This interim arrangement places the ongoing negotiations in the context of managing the field until a long-term formula is reached. The latest announcement moves the talks to agreement on the contract terms, with signing still targeted for a later date.
Oil Ministry estimates cited by Shafaq illustrate the scale of the asset under negotiation: its recoverable reserves exceed 13 billion barrels. The ministry estimated the field’s production at between 400,000 and 480,000 barrels per day, equivalent to about 10% of Iraq’s total crude output. A Reuters report published on November 3 put production at about 460,000 barrels per day. The National described the field in an earlier report as one of Iraq’s largest oil-producing sites and estimated its recoverable reserves at about 14 billion barrels. It also said the field had been producing about 460,000 barrels per day, or nearly 9% of national output, before production was cut because of the closure of the Strait of Hormuz.
Talks on West Qurna 2 are proceeding alongside other discussions between Baghdad and Chevron, covering the Nasiriyah field and four exploration blocks. The Oil Ministry said these discussions were ongoing, according to World Oil. This indicates that engagement between the two sides covers more than one project, while the agreement announced on November 3 concerns the terms of the West Qurna 2 contract. The oil minister said the ministry would provide “full support” to Chevron, ExxonMobil and other U.S. companies operating in Iraq. The minister linked that support to the companies’ experience in developing fields and transferring technology, according to a statement carried by the Iraqi News Agency and cited by World Oil.
The contracting process comes amid broader changes in Iraq’s oil contract models. The oil minister said in an October 20 Reuters report that frameworks were evolving from the initial licensing-round arrangements in 2010 toward profit-sharing mechanisms, rather than production-sharing agreements. In July, Prime Minister Ali al-Zaidi said U.S. companies would be given priority if they wanted to operate in Iraq, linking this to the government’s drive to attract investment in the energy sector. These remarks point to a stated policy of supporting U.S. companies’ operations, but do not in themselves set the final terms of the West Qurna 2 contract. The terms agreed by Baghdad and Chevron remain the basis for the next step toward the targeted signing before year-end.
In the stock market, Chevron shares closed at $225.27 on November 3, according to EL7 data. The stock had closed at $235.52 on October 30, before the subsequent close at $225.27. This places the closing prices in the period surrounding the agreement announcement, without establishing that the share move was a response to the news. The target date for signing the West Qurna 2 contract remains before the end of 2026, while discussions continue on Nasiriyah and the four exploration blocks. The announcement did not set a more precise signing date than the stated time frame.