Western oil majors sign Iraq energy agreements worth more than $60 billion

Western energy companies signed agreements and memorandums of understanding worth more than $60 billion with Iraqi officials on Friday, covering oil and gas projects, pipelines, healthcare and technology.

The deals were announced at a US-Iraq business summit at the US Chamber of Commerce as Baghdad sought deeper commercial ties with Washington and alternative export routes that would reduce its dependence on the Strait of Hormuz.

Iraqi Prime Minister Ali al-Zaidi said his government was following an open-door policy for foreign investors.

“Everybody who has a project can come and talk to us. We will not make it difficult for anyone,” Zaidi said through a translator.

Zaidi visited Chevron’s headquarters in Houston on Thursday before Iraqi officials signed agreements with the US oil company to advance its potential entry into the West Qurna 2 and Nassiriya oilfields.

Jake Spiering, Chevron’s president of corporate business development, said the company would invest in a pipeline designed to bypass the Strait of Hormuz and provide Iraq with another export route.

The proposed pipeline could transport Iraqi crude to Syria’s western coast on the Mediterranean Sea.

Iraq’s oil exports have been disrupted by the US-Israeli war on Iran and the partial closure of the Strait of Hormuz, through which about 20% of global oil and gas supplies usually pass.

Spiering said Iraq could eventually develop into a regional energy trading centre comparable with the Henry Hub natural gas and Cushing oil hubs in the United States.

ConocoPhillips separately agreed to acquire a 42% stake in BP Energy of Kirkuk Ltd, joining BP in the redevelopment of four producing oilfields in northern Iraq.

BP CEO Meg O’Neill said Iraq had “fantastic potential from a resource perspective” and that the partnerships would support energy security in Iraq and the wider global market.

BP has operated in Iraq for decades and was involved in the discovery of the Kirkuk oilfield in 1927.

ConocoPhillips CEO Ryan Lance said the company lacked BP’s long history in Iraq but had experience operating in challenging regions, including Alaska’s North Slope.

“We are anxious to bring our technology, our know-how, our people, and our capital to help the Iraqi people,” Lance said.

Tom Barrack, President Donald Trump’s envoy to the region, said the war with Iran had created instability but had also placed Iraq “at the forefront of a new strategic security alliance” with the United States and other countries.

Zaidi was on a five-day visit to the United States and met Trump at the White House on Tuesday. Trump said the two countries would conclude several agreements that would create jobs in both markets.