SEATTLE (Oil Monster): Iraq’s cabinet has approved a government takeover of petroleum operations at the giant West Qurna 2 oilfield, acting under provisions outlined in its service contract with Russia’s Lukoil, according to Reuters. The decision positions the state to maintain stable production at one of the world’s largest oilfields amid rising geopolitical constraints.
The government said operational funding will be drawn from the Majnoon oilfield account, which is replenished through crude export revenues handled by state marketer SOMO. Iraq’s state-run Basra Oil Company (BOC) will manage salaries, operating expenses, and payments to subcontractors using the Majnoon-linked funds, an Iraqi oil official confirmed.
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Crude output at West Qurna 2 is currently steady at around 465,000 to 480,000 barrels per day. A source at the Ministry of Oil said the takeover aims to prevent potential supply disruptions stemming from international sanctions imposed on Lukoil.
West Qurna 2 accounts for nearly 9% of Iraq’s total oil production, underscoring its strategic importance to the country, OPEC’s second-largest producer. The move follows Lukoil’s force majeure declaration on November 4, 2025, after US sanctions targeted major Russian energy firms. Lukoil is now evaluating an exit from overseas assets under a US Treasury OFAC wind-down license. Industry sources previously indicated ExxonMobil has shown interest in acquiring the field’s controlling stake.
