Exxon Mobil has signed a preliminary deal with Iraq to help develop the massive Majnoon oilfield and strengthen the country’s export capacity, Iraqi officials said Wednesday. The agreement marks the U.S. energy giant’s reentry into Iraq two years after it exited the West Qurna project.
The non-binding accord follows recent arrangements Iraq has struck with Chevron (CVX), BP (BP) and TotalEnergies (TE) as Baghdad looks to expand oil and gas production under more favorable investment terms.
Iraq, home to some of the world’s largest reserves, currently pumps about 4 million barrels a day but is targeting more than 6 million by 2029. The goal has been repeatedly slowed by political gridlock, corruption and infrastructure limits.
Majnoon, located near Basra, holds an estimated 38 billion barrels of oil in place. Prime Minister Mohammed Shia al-Sudani announced the agreement without disclosing details. The deal includes profit-sharing on crude and refined products as well as investments in southern export infrastructure, Reuters reported Wednesday, citing people familiar with the matter.
Iraq’s state oil marketer, SOMO, is also expected to sign an arrangement with Exxon for overseas storage capacity, potentially in Singapore, to boost access to Asian markets.
Exxon (NYSE:XOM) was one of the first major Western oil companies to reenter Iraq after the 2003 U.S. invasion, but later withdrew from projects in both Basra and the Kurdistan region due to weak returns and disappointing exploration results. Its West Qurna 1 stake was handed to PetroChina, which became the operator.
The move comes shortly after Baghdad reached a deal with the Kurdistan Regional Government and international oil companies to resume crude exports through Turkey, adding as much as 230,000 barrels a day to global supply at a time when OPEC+ producers are competing for market share.