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Iraq Offers U.S. Oil Giants Russia’s 14 Billion Barrel Lukoil Oilfield Stake
Iraq has invited major U.S. oil companies to develop the giant West Qurna 2 field following Russian energy giant Lukoil’s forced exit under Western sanctions. The move represents a significant shift in Iraq’s energy partnerships and a major opportunity for American firms to regain ground in one of the world’s largest oilfields.
The Field
West Qurna-2 is one of the world’s largest onshore oilfields, located 65 kilometers northwest of Basra in southern Iraq. The field holds initial recoverable reserves of approximately 14 billion barrels, with more than 90% concentrated in the Mishrif and Yamama formations.
The field currently produces about 9% of Iraq’s total oil output, with capacity reaching 480,000-500,000 barrels per dayfollowing completion of its second development phase. At peak efficiency, the field can sustain production between 635,000 and 650,000 bpd.
Lukoil’s Exit
Russian oil company Lukoil held a 75% operating stake in West Qurna-2, with Iraq’s state-owned North Oil Company holding the remaining 25%. Lukoil declared force majeure at the field after the United States rejected a sanctioned asset sale, effectively forcing the Russian company out of the project.
In early December 2025, Iraq temporarily shut down production at the field due to a pipeline leak, though operations were later restored. The disruption added urgency to Iraq’s search for a new operator.
U.S. Companies Enter the Race
Iraq’s Oil Ministry has now extended exclusive invitations to several major U.S. energy firms to take over development of West Qurna-2. Chevron has entered the race for the field, while ExxonMobil is in active talks with Iraqi officials about acquiring Lukoil’s stake.
ExxonMobil recently signed agreements to develop Iraq’s Majnoon oil field, marking the company’s return to Iraqi upstream operations after exiting the West Qurna-1 project in early 2024. The Majnoon deal demonstrates ExxonMobil’s renewed commitment to Iraq and positions the company as a strong contender for West Qurna-2.
Strategic Context
The shift represents a reversal of Iraq’s energy trajectory over the past decade, during which Russia and China built deep leverage in the country through oil contracts, pipeline control, and ties to Iran-backed groups. Western companies are now regaining ground through major new deals:
- TotalEnergies launched the final phase of Iraq’s Gas Growth Integrated Project (GGIP) in September 2025
- BP maintains significant operations in the Rumaila field
- Chevron and ExxonMobil are both pursuing expanded Iraqi portfolios
A senior legal source working closely with the U.S. Treasury Department told OilPrice.com that the development marks “a huge turnaround in the trajectory it [Iraq] had been headed with Russia and China, marking a massive win for us [the U.S.] and Europe.”
Development Plans
Under a 2023 supplementary agreement that Lukoil signed with Basra Oil Company, the field development plan called for:
- Doubling production capacity to 800,000 bpd by 2025
- Bringing new multi-well pads into production
- Commissioning complex gas treatment plants for the Yamama formation
- Construction of export pipelines and water flooding units
- Expansion of tank battery infrastructure
The incoming U.S. operator will inherit these development plans and the responsibility for executing the next phase of expansion.
Bottom Line
West Qurna-2 represents one of the most significant oilfield opportunities to emerge in years. With Lukoil’s forced exit under sanctions, U.S. energy companies have a chance to secure long-term access to world-class reserves while strengthening America’s strategic position in Iraq. The outcome of current negotiations will shape both Iraqi energy policy and U.S.-Iraq relations for decades to come.