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By John Lee.

Iraq's Council of Ministers has approved an amicable settlement with Lukoil to transfer petroleum operations at the West Qurna 2 field to Basra Oil Company (BOC).

The settlement addresses outstanding matters relating to invoices and the employment of foreign staff, subject to certification by a reputable external auditor.

It also designates the tax due on the salaries of foreign employees as final revenue to the state treasury.

The West Qurna-2 field, operated by Lukoil under a service contract, is fully state-owned. Following US sanctions on Lukoil and the company declaring force majeure, the Iraqi Council of Ministers approved the transfer of operational management of the field to Basra Oil Company (BOC).

(Source: PMO)

By John Lee.

Russia's Lukoil has signed an agreement with US investment company Carlyle for the sale of LUKOIL International GmbH, a wholly owned subsidiary that holds the its international assets.

The agreement is non-exclusive and subject to regulatory approval, including permission from the US Department of the Treasury's Office of Foreign Assets Control (OFAC).

Lukoil said it continues negotiations with other potential buyers.

Iraq's West Qurna-2 oil field, operated by Lukoil under a service contract, is fully state-owned. Following recent US sanctions on Lukoil and the company declaring force majeure, the Iraqi Council of Ministers approved the transfer of operational management of West Qurna-2 to Basra Oil Company (BOC).

Recent press reports say that Chevron is interested in taking over operations at West Qurna 2.

Full statement from Lukoil:

LUKOIL AGREES WITH CARLYLE ON SALE OF INTERNATIONAL ASSETS

PJSC "LUKOIL" (hereinafter - the "Company") informs that it signed agreement with US investment company Carlyle on sale of LUKOIL International GmbH (100% subsidiary of PJSC "LUKOIL" which owns international assets of LUKOIL Group). The transaction does not include the assets in Kazakhstan which will remain to be owned by LUKOIL Group and continue their operations under respective license.

The agreement signed is not exclusive for the Company and is subject to some conditions precedent such as procurement of necessary regulatory approvals including permission of the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) for the transaction with Carlyle.

The Company also continues negotiations with other potential purchasers.

LUKOIL International GmbH is on sale owing to restrictive measures introduced by some countries against the Company and its subsidiaries.

(Source: Lukoil)

From Amwaj Media. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

How Iraq's oil sector is emerging as battleground for Russia, US

Upending dynamics in Iraq's energy sector, Baghdad has announced that it is nationalizing the West Qurna-2 oil field following the exit of the site's Russian operator. ...
The retreat severely undermines Russia's economic foothold in the country, with American companies now poised to potentially fill the vacuum.

The full article can be viewed here.

By Simon Watkins for OilPrice.com. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Is Iraq About to Make Its Biggest Geopolitical Pivot in Years?

Washington's escalation of sanctions on Russia's top oil firms has opened space for Western majors to re-enter Iraq.

Click here to read the full report.

By John Lee.

The Iraqi Embassy in Moscow has issued a clarification regarding reports that Iraq plans to nationalise the West Qurna-2 oil field, operated by Russia's Lukoil.

The embassy confirmed that the field is fully state-owned. Under the 2008 licensing round agreement, Lukoil managed and developed the field and produced oil under a service contract in exchange for fees.

Following recent US sanctions on Lukoil and the company declaring force majeure, the Iraqi Council of Ministers on 7 January 2026 approved the transfer of operational management of West Qurna-2 to Basra Oil Company (BOC). This move is intended to maintain production of around 480,000 barrels per day in line with the service contract and development terms.

Key measures include:

• Obtaining the necessary approvals to finance operations via the Majnoon field account
• Supporting the account through the sale of oil shipments by the  State Oil Marketing Organization (SOMO)
• Maintaining Lukoil's role for one year, during which it may transfer its rights under the service contract to any company meeting Ministry of Oil standards or resume operations as operator if sanctions are lifted

(Source: Ministry of Foreign Affairs)

By John Lee.

State-owned Basra Oil Company (BOC) has been approved by the Council of Ministers to assume responsibility for managing petroleum operations at the West Qurna 2 oilfield, in line with the provisions of the field's service and development contract.

According to a statement from the Prime Minister's Office, the Cabinet decision also authorises the relevant authorities to obtain the required formal approvals to finance petroleum operations through the Majnoon field account. It says this will be achieved by strengthening the account via the sale of crude oil cargoes marketed by the State Oil Marketing Organization (SOMO).

In early December, Iraq's Ministry of Oil issued exclusive invitations to several major US oil companies to submit bids to take over the field, after Russia's Lukoil  was hit with US sanctions. Companies including Chevron were understood to be considering investment.

(Source: PMO)

By John Lee.

Iraq participated via video link in a meeting of OPEC+ countries to review global oil market conditions and the production outlook, as the group confirmed it will maintain its current production policy during early 2026.

Full statement from OPEC:

Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman reaffirm commitment to market stability on steady global economic outlook and current healthy oil market fundamentals as reflected in low inventories

The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman met virtually on 4 January 2026, to review global market conditions and outlook.

The eight participating countries reaffirmed their decision on 2 November 2025 to pause production increments in February and March 2026 due to seasonality as detailed in the table below.

The eight participating countries reiterated that the 1.65 million barrels per day may be returned in part or in full subject to evolving market conditions and in a gradual manner. The countries will continue to closely monitor and assess market conditions, and in their continuous efforts to support market stability, they reaffirmed the importance of adopting a cautious approach and retaining full flexibility to continue pausing or reverse the additional voluntary production adjustments, including the previously implemented voluntary adjustments of the 2.2 million barrels per day announced in November 2023.

The eight countries reiterated their collective commitment to achieve full conformity with the Declaration of Cooperation, including the additional voluntary production adjustments that will be monitored by the Joint Ministerial Monitoring Committee (JMMC). They also confirmed their intention to fully compensate for any overproduced volume since January 2024.

The eight OPEC+ countries will hold monthly meetings to review market conditions, conformity, and compensation. The eight countries will meet on 1 February 2026.

(Sources: OPEC / Ministry of Oil)

By Ahmed Tabaqchali, for the Institute of Regional and International Studies (IRIS) at the American University of Iraq, Sulaimani (AUIS). The opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Iraq's Gas Flaring Paradoxes: Economic and Technical Obstacles

Almost every year, since 2012, Iraq vies with Iran for the second or third-ranked gas flaring country in the world behind Russia. In 2024, it ranked third, for the second year running, with flare volumes of 18.2 billion cubic meters (BCM), accounting for 12% of the world's total.

These wasted resources could contribute to closing the country's growing electricity supply-demand gap, especially considering that Iraq consumed 19.7 BCM of gas in the same year, of which 7.8 BCM were imported from Iran. Such persistent high flare volumes stand in contrast to frequent official declarations that flaring is being seriously addressed and that it will end in a few years, the latest such declaration being that the elusive goal of zero flaring would be achieved by 2028.

Promisingly, this time it has substance; nevertheless, the timeframe is ambitious and a lot can still derail it.

The full report can be read here.

To browse our comprehensive library of reports on Iraq, click here.

From Amwaj Media. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Could South Korea become Iraq's leading arms supplier?

In a significant boost to Iraq's ground-based air defenses, Baghdad expects to receive South Korean M-SAM-II missile systems, also known as KM-SAM, early next year.

Baghdad's air defenses have so far been limited to short-range American and medium-range Russian systems.

This may see Seoul give other leading arms suppliers -- namely the US, Russia and France -- some serious competition.

The full article can be viewed here.

By John Lee.

Iraq's Ministry of Oil has issued exclusive invitations to several major US oil companies to submit bids for taking over the operatorship of the West Qurna-2 field.

The Ministry said it is pursuing a transparent, competitive process based on approved criteria for awarding oilfield development contracts. Direct negotiations are under way with the invited companies, which will be allowed to submit offers and compete openly.

According to the statement, transferring management of West Qurna-2 to a leading US operator would support Iraq's production stability, safeguard its market share, and ensure the continuity of state revenues. It would also strengthen Iraq-US economic relations, facilitate technology transfer, and broaden the international expertise working in Iraq's oil sector.

The Ministry added that greater participation from major US firms reflects Iraq's strategic importance in global energy markets and contributes to long-term economic and strategic sustainability.

Russia's Lukoil, the operator of the field, said on 14th November that it was in negotiations with several potential buyers for its international assets, following restrictions imposed earlier that month. The United States subsequently issued a sanctions waiver allowing continued operations related to Lukoil until 13th December.

See also:

Lukoil in talks with Iraqi PM as US issues Sanctions Waiver

US Treasury Department statement

Lukoil statement

Jiyad: Oil Ministry should Brace for Russia's Coerced Exodus

(Source: Ministry of Oil)