West Qurna Oil Field Development and Phases
The West Qurna oil field represents one of the most significant energy assets in Iraq, divided into distinct phases to manage its massive reserves and technical requirements. These developments involve multi-billion dollar investments from global energy giants and are critical to Iraq's national oil output.
West Qurna Phase I
In November 2009, a joint venture between ExxonMobil and Shell secured a $50 billion contract to develop West Qurna Phase I, a field containing an estimated 9 billion barrels of oil. According to the Iraqi Oil Ministry, the project's financial structure consisted of a $25 billion investment and $25 billion in operating fees. Beyond energy production, the project was designed to stimulate the underdeveloped southern region by creating approximately 100,000 jobs.
The primary objective for ExxonMobil was to scale production from 0.27 million barrels per day (bpd) to 2.25 million bpd within a seven-year window. Under the terms of the agreement, the Iraqi government agreed to pay the ExxonMobil-Shell alliance $1.90 per barrel produced. However, the operational leadership shifted in November 2023, when PetroChina replaced ExxonMobil as the main operator of West Qurna 1.
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West Qurna Phase II
Development of West Qurna Phase II began in December 2009, when Russia's Lukoil and Norway's Statoil were granted the rights to the field, which holds 12.88 billion barrels of oil. The Lukoil-Statoil alliance was set to receive $1.15 per barrel produced. The production roadmap aimed for 120,000 bpd by 2012, with a long-term goal of reaching 1.8 million bpd over 13 years.
Ownership structures evolved in March 2012 when Statoil sold its 18.75% stake to Lukoil. This transaction gave Lukoil a 75% stake in the field, while the Iraqi state oil company retained the remaining 25%. By 2023, Lukoil announced plans to double production at West Qurna 2 to 800,000 bpd.
Recent geopolitical tensions have impacted the field's stability. On November 4, 2025, Lukoil declared force majeure—a legal clause exempting a party from liability when an extraordinary event occurs—due to Western sanctions, specifically from the U.S. and UK. This declaration indicated a potential total exit from the field. In response, Iraq halted all crude oil and cash payments to Lukoil. At the time of this disruption, the field was producing roughly 480,000 bpd, accounting for approximately nine percent of Iraq's total oil output.
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Water-Injection Project
To support the extraction process, a multibillion-dollar water-injection project was initiated in 2010. Water injection is a technique used to maintain reservoir pressure and increase oil recovery. This project, awarded to ExxonMobil, involved the construction of a plant capable of producing 10–12 million barrels of water per day to support six major oil-field development projects. The planned alliance for this infrastructure included Shell, Eni, Lukoil, CNPC, and Petronas.
Key Facts
- West Qurna Phase I Reserves: 9 billion barrels.
- West Qurna Phase II Reserves: 12.88 billion barrels.
- Phase I Operator Change: PetroChina took over from ExxonMobil in November 2023.
- Phase II Ownership: Lukoil (75%) and Iraqi state oil company (25%) following Statoil's exit.
- Economic Impact: Phase I was estimated to create 100,000 jobs in southern Iraq.
- Water-Injection Capacity: Planned for 10–12 million barrels of water per day.
| Feature | Phase I | Phase II |
|---|---|---|
| Estimated Reserves | 9 Billion Barrels | 12.88 Billion Barrels |
| Initial Operators | ExxonMobil & Shell | Lukoil & Statoil |
| Current/Recent Operator | PetroChina | Lukoil |
| Payment per Barrel | $1.90 | $1.15 |
| Production Target | 2.25 Million bpd | 1.8 Million bpd (Long-term) |
Frequently Asked Questions
Who is the current operator of West Qurna Phase I?
As of November 2023, PetroChina is the main operator of West Qurna Phase I, having replaced ExxonMobil.
What happened to Statoil's involvement in West Qurna Phase II?
In March 2012, Statoil sold its 18.75% stake in the field to Lukoil, which increased Lukoil's ownership to 75%.
Why did Lukoil declare force majeure in 2025?
Lukoil declared force majeure at the West Qurna-2 field due to the impact of sanctions imposed by Western nations, specifically the United States and Great Britain.
What is the purpose of the water-injection project?
The project involves building a plant to produce 10–12 million barrels of water per day to support six major oil-field development projects, helping to maintain pressure and improve oil recovery.
How much of Iraq's total oil output did West Qurna-2 provide before the 2025 dispute?
West Qurna-2 was producing approximately 480,000 barrels per day, which represented about nine percent of Iraq's total oil output.