Iraq signs agreement with US energy giant Chevron on oil exploration

Prime Minister Al Sudani welcomes company back to country after agreement in principle

Iraqi Prime Minister Mohammed Shia Al Sudani, centre, during the the signing of an agreement between the Oil Ministry and Chevron. Photo: Iraqi Prime Minister Media Office / X

Iraqi Prime Minister Mohammed Shia Al Sudani announced an agreement in principle on Tuesday between the Ministry of Oil and US energy company Chevron.

Mr Al Sudani's office said the Heads of Agreement includes four exploration blocks, the development of the Balad oilfield and possibly other fields and projects.

During a meeting with Chevron vice president Frank Mount in Iraq, Mr Al Sudani welcomed the company's return to work in the country, “affirming that the government has adopted a different approach in dealing with major oil companies and their investments in Iraq, particularly American ones”, his office said.

Mr Al Sudani also spoke of Chevron's efforts in transferring oil technology to Iraq, its community contributions and environmental policies it follows in its oil projects.

Chevron said in a statement that the agreement between it and the Iraqi Oil Ministry allows the US company to "assess potential opportunities in Iraq and establishes exclusive negotiations between" the two.

“Iraq is a major producer of crude oil and holds substantial oil and gas resources," Mr Mount said.

"We are confident that Chevron, with its proven track record and expertise in successfully developing oil and gas projects, has the resources, experience and technology to support Iraq to further develop new energy resources.”

The agreement in principle follows one made by US company SLB – formerly known as Schlumberger – in July. The contract signed between Iraq's Ministry of Oil and SLB was aimed at boosting natural gas production at the Akkas gasfield. Iraq's Oil Minister Hayan Abdel Ghani said at the time that the deal aimed to raise production levels to 100 million standard cubic feet a day.

Mr Al Sudani also held talks with Baker Hughes chief executive Lorenzo Simonelli this year to discuss the US energy technology company's projects in Iraq.

Despite being the second-largest producer in Opec, Iraq still depends on Iran for about a third of its electricity needs. Baghdad has come under increasing pressure from Washington to be less reliant on Tehran.