On December 2, 2025, a significant development in the global oil industry quietly unfolded: Exxon Mobil, the American energy giant, approached the Iraqi oil ministry to express interest in acquiring Russian firm Lukoil’s majority stake in the massive West Qurna 2 oilfield. The news, confirmed by five Iraqi officials with direct knowledge of the matter and widely reported by sources including Reuters and Global Banking and Finance Review, marks a potential turning point not only for the companies involved but also for Iraq’s oil sector and the geopolitics of energy in the region.
Lukoil, one of Russia’s largest oil producers, is under pressure to divest its international assets following the latest round of U.S. sanctions. The company’s 75% operational stake in West Qurna 2—its biggest foreign asset—has become the centerpiece of these efforts. The oilfield, located in southern Iraq near Basra, is among the world’s largest, pumping out roughly 470,000 barrels of oil per day. That’s about 0.5% of the world’s total oil supply and a hefty 9% of Iraq’s entire output, according to Reuters. For context, Iraq is the second-largest producer in OPEC, trailing only Saudi Arabia.
Exxon Mobil’s interest in West Qurna 2 is not just a matter of business as usual. The move would mark a substantial expansion of Exxon’s presence in Iraq, after a period of relative withdrawal. Notably, Exxon had long operated the neighboring West Qurna 1 project before exiting in 2024, when that field was producing around 550,000 barrels per day. At the time of its departure, Exxon valued its 32.7% stake in West Qurna 1 at $350 million, as reported by Reuters.
The timing of Exxon’s approach is anything but coincidental. Lukoil declared force majeure at West Qurna 2 after Iraq halted cash and crude payments to the company, further complicating the operational landscape. Meanwhile, the U.S. Treasury has cleared potential buyers to negotiate with Lukoil until December 13, 2025, though any specific deal will require formal approval. According to Reuters, Exxon isn’t the only American major eyeing Lukoil’s assets; Chevron has also been considering options to buy parts of the Russian company’s portfolio.
The Iraqi oil ministry is not sitting idly by. On December 1, 2025, it officially invited several U.S. oil companies to enter negotiations about taking over West Qurna 2, aiming to transfer the operation of the field through a competitive bidding process. The ministry’s openness to American companies reflects Iraq’s broader strategy to accelerate oil and gas production by offering more generous terms and attracting foreign expertise. In recent years, Iraq has inked deals with other oil majors, including BP, Chevron, and TotalEnergies, as it seeks to boost its energy sector’s output and stability.
For Exxon, the potential acquisition is part of a broader return to Iraq. In October 2025, the company signed a non-binding agreement with the Iraqi government to help develop the giant Majnoon oilfield and expand oil exports. This agreement signaled Exxon’s renewed commitment to Iraq, following its earlier exit from West Qurna 1. According to Reuters, “Exxon’s move to return to Iraq followed a string of deals with other oil companies, including Chevron, BP, and TotalEnergies, as Iraq seeks to accelerate oil and gas production by offering more generous terms.”
Inside Iraq, Exxon is seen as the leading candidate to take over Lukoil’s position. "Exxon is our preferred option to take over from Lukoil. The company has the capacity and experience needed to manage a field as large and complex as West Qurna 2," a senior Iraqi oil official who oversees foreign company operations in the south told Reuters. This sentiment was echoed by another senior oil ministry official, reinforcing the perception that Exxon’s technical know-how and deep pockets make it the logical successor.
The importance of West Qurna 2 to Iraq’s oil economy cannot be overstated. With its massive daily output, the field is a linchpin in Iraq’s efforts to maintain its status as a top-tier oil exporter. Any disruption—or successful transfer of operations—could have ripple effects across global energy markets. Lukoil’s predicament, meanwhile, underscores the far-reaching impact of international sanctions. The company’s need to sell off its prized foreign asset is directly tied to the U.S. measures, which have effectively boxed it out of key financial and operational channels.
For Lukoil, the situation is precarious. The declaration of force majeure at West Qurna 2 came after Iraq halted payments, leaving the Russian firm with few viable options. The company did not respond to requests for comment from Reuters and Global Banking and Finance Review, while Exxon also declined to comment on the matter. The silence from both companies only adds to the air of uncertainty surrounding the negotiations.
The U.S. government’s role in this saga is also worth noting. By granting a window for potential buyers to negotiate with Lukoil until mid-December, the Treasury Department is walking a fine line—balancing the enforcement of sanctions with the practical realities of global oil supply and the interests of American companies. Any deal that emerges from these talks will need to pass muster with U.S. authorities, ensuring that sanctions are not inadvertently undermined.
Geopolitically, the possible transfer of such a significant oil asset from a Russian company to an American one in Iraq is bound to raise eyebrows in Moscow, Washington, and beyond. For Iraq, the move could help insulate its vital energy sector from the fallout of international sanctions while ensuring continued investment and operational expertise. For Exxon, it represents a chance to reassert its presence in a region that remains central to the world’s energy landscape.
Amid all these high-level maneuvers, the stakes for Iraq’s economy are enormous. Oil revenues remain the backbone of the country’s budget, funding everything from infrastructure to social services. Ensuring the smooth operation of West Qurna 2—and attracting a reliable, experienced operator—is crucial for Iraq’s stability and growth.
As negotiations continue behind closed doors, industry watchers and policymakers alike will be keeping a close eye on developments. Will Exxon ultimately succeed in acquiring Lukoil’s stake? How will the U.S. government navigate the competing imperatives of sanctions enforcement and energy security? And what does this all mean for the future of Iraq’s oil sector?
For now, one thing is clear: the fate of West Qurna 2 is more than just a business story. It’s a window into the shifting alliances, economic pressures, and geopolitical calculations that define the modern oil industry. As the December 13 deadline for negotiations approaches, all eyes will remain fixed on Basra—and on the boardrooms of Exxon and Lukoil.
The coming weeks promise to reveal whether a new chapter is about to be written in the long, complicated story of Iraq’s oil fields and the global players who vie for control.
