Iraq signed a deal with a U.S. energy giant, ExxonMobil, to help it develop its giant Majnoon oil field and expand oil exports, government officials and sources said, marking the U.S. major's return to the country two years after leaving.
The non-binding agreement with Exxon follows a string of deals with other oil companies, including Chevron, BP and TotalEnergies, as Iraq seeks to accelerate oil and gas production by offering more generous terms.
Iraq holds some of the world's largest oil and gas reserves and once aspired to rival Saudi Arabia with output of up to 12 million barrels per day (bpd).
It currently produces around 4 million bpd and aims to exceed 6 million bpd by 2029, although progress has been hampered due to a number of issues, from infrastructure bottlenecks to years of conflict.
Majnoon, located 60 kilometers (37 miles) from Basra in southern Iraq, is one of the biggest oil fields in the world with an estimated 38 billion barrels in place.
Iraqi Prime Minister Mohammed Shia al-Sudani announced the deal with Exxon on Wednesday but did not provide details.
The agreement will involve a profit-sharing agreement covering crude oil and refined products and plans to upgrade Iraqi oil export infrastructure in the south, according to four sources with knowledge of the matter.
Iraq's state oil company SOMO will also sign an agreement with Exxon to secure storage capacity in the Asian market, the sources said.
SOMO and Exxon did not immediately respond to Reuters requests for comment.
SOMO could use Exxon's storage in Singapore, Iraqi state news agency INA reported in September.
Exxon was one of the first Western oil firms to enter Iraq to develop oil fields after the U.S. invasion in 2003. But it left the West Qurna project due to what sources described as poor returns.
It also tried to develop fields in Iraq's semi-autonomous northern region despite Baghdad's ire, but also left those projects due to what sources said were poor exploration results.
After exiting Iraq's giant West Qurna 1 oil field, Exxon transferred its remaining stake and operatorship to PetroChina, which became the lead contractor.
In September, Iraq's federal government reached an agreement with its Kurdistan Regional Government (KRG) and international oil companies to resume crude exports through Türkiye that were suspended in 2023.
That is expected to eventually return up to 230,000 bpd to international markets at a time when OPEC+ oil-producing countries are boosting output to gain market share.
