ConocoPhillips has its eyes and hopes set on Iraq’s oil-rich West Qurna field. "We’re doing a lot of work with the ministry and Lukoil on developing" a plan for West Qurna, Bill Berry, executive vice president for ConocoPhillips, said at a meeting Wednesday with analysts in New York, Marketwatch.com reports.
Russia’s Lukoil had been granted rights to West Qurna under Saddam Hussein. Since he was toppled by the U.S. invasion in 2003, its status has remained unclear. In 2004 Conoco pumped $2 billion into Lukoil to get a 7.6% percent stake in the company and form a strategic alliance. Since then Conoco has added more cash, increasing its stake in the major Russian oil firm toward 20%.
As part of the deal, Conoco was to get a piece of the Iraq oil production if Lukoil managed to retain its rights to West Qurna. Iraq’s oil minister Hussein al-Shahristani now says that he’s been in talks with Shell and Total. He hopes to put some projects up for bid later this year and says Lukoil has as good a chance of winning as anyone else.
Conoco has got to get oil somewhere. It has agreed to cede majority operating control of its Venezuelan operations to the government at the behest of President Hugo Chavez on May 1, but it is predicting a production increase of 3%.
Iraq’s reserves could be key to meeting ConocoPhillips forecasts of producing 2.375 million barrels of oil equivalent a day in 2007, up slightly from 2.358 million barrels in 2006.
It’s not yet clear how ConocoPhillips will fare in its Iraq advenutre. One thing is certain: It’s all about the oil.