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U.S. oil company Chevron inked preliminary agreements with Iraq’s state-owned Basra Oil Company to explore assuming control of the West Qurna 2 oil field, one of the country’s largest production sites, as Iraq reshapes ownership following sanctions on Russia’s Lukoil.
The agreement, signed in Baghdad on Monday, sets out terms for Chevron and Basra Oil Company to share confidential technical and operational data and begin exclusive negotiations over the project, the company stated.
The deal requires approval from Iraq’s Council of Ministers and authorization from the U.S. Treasury’s Office of Foreign Assets Control, as Lukoil faces a Feb. 28 deadline to divest its assets under U.S. sanctions.
Awarded to Lukoil in 2009, West Qurna 2 lies about 65 kilometers (40 miles) northwest of Basra in southern Iraq and produces around 480,000 barrels per day, accounting for roughly 10% of the country’s total oil output.
The project has come under renewed focus after U.S. sanctions targeted Lukoil, which holds a 75% stake and operates the field. In January, the Russian firm agreed to sell much of its international portfolio to Carlyle Group, though the arrangement remained preliminary and non-exclusive.
Iraqi authorities have already begun restructuring the project’s ownership. The government approved a settlement process allowing Lukoil to hand operational control to Basra Oil Company, the state-run operator responsible for production in the Basra region.
The move comes after Chevron signed an agreement in principle with Iraq in August 2025 to develop the Nasiriyah oil project in southern Dhi Qar province, marking its most significant step back into the country in recent years.
Iraq expects the Nasiriyah project to reach an initial production capacity of 600,000 barrels per day within seven years.
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