Major oil companies around the world are returning to Iraq, and this return is due to Iraq's new and attractive proposals regarding participation in oil production. For the first time in decades, Iraq is offering the desired yield to oil companies, which could create a significant transformation in the country's oil industry.
New Agreements and Attractive Financial Terms
According to reports, Iraq's new contracts are closer to production-sharing agreements than service contracts, allowing companies to benefit more from rising oil prices and register their reserves on the balance sheet. Mike Wirth, CEO of Chevron, announced at the Energy Intelligence Forum in London that Iraq's financial terms have become significantly more attractive.
Chevron has also signed a preliminary agreement with Baghdad for former Lukoil assets, and the final contract is expected to be signed in 2027. This indicates the commitment of major companies to the Iraqi oil market and its future growth.
Large Investments and Production Forecasts
TotalEnergies, as the first oil giant to enter Iraq three years ago with a $27 billion investment, has created better conditions for operations in the country. Following that, BP and ConocoPhillips have also joined the ranks of major oil companies returning to Iraq.
According to Bloomberg, Iraq's production capacity could reach five million and five hundred thousand barrels per day by 2029. This is while before the current war in the region, Iraq's production capacity was four million and five hundred thousand barrels. This increase in capacity reflects the high potential of Iraq's oil and the willingness of oil companies to invest in the country.
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