Exxon Eyes Return To Iraq, Plans To Explore Majnoon Oil Field: Report

Exxon Mobil (XOM) is reportedly planning to re-enter Iraq after exiting in early 2024 by signing agreements to lay the groundwork for exploring the country’s vast Majnoon field.

According to a Bloomberg News report, citing a person familiar with the matter, the oil major plans to sign a heads of agreement with Basra Oil Co. and SOMO, Iraq’s oil marketing company, in the coming days. The report further stated that the deal will include discussions on export infrastructure and potential oil marketing projects in the southern part of the country.

Despite being one of the first Western oil firms to be allowed into Iraq following the toppling of Saddam Hussein’s government, Exxon's operations in the West Asian country have often been marred by major political standoffs, security risks, and contractual disputes. Exxon sold its primary investment in the country, a stake in the West Qurna-1 oil field in southern Iraq, in January 2024.

Retail sentiment on Stocktwits about Exxon was in the ‘neutral’ territory at the time of writing.

Majnoon, located 60 km (37 miles) from Basra in southern Iraq, is one of the biggest oil fields in the world with an estimated reserve of 38 billion barrels. However, Western oil firms have struggled to agree on profit-sharing terms with the Iraqi government, with a prominent example being Shell’s exit from the field in 2017.

The Bloomberg report stated that Exxon would need to complete a series of commercial and technical studies and agree to a production-sharing contract before it begins pumping oil, a process that could take years.

Exxon stock has gained 5.5% this year. Earlier this week, the company stated that it anticipates higher refining margins will boost its third-quarter earnings by $300 million to $700 million, compared to the previous quarter.

However, the Texas-based firm also flagged that restructuring costs could lower its earnings by $400 million to $600 million. The company said last week that it is laying off 2,000 workers amid a decline in oil prices.

Also See: Webull Stock Dips As Lock-Up Expiry Looms — But Retail Traders See Buying Opportunity

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