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Iraq oil minister says deal with Exxon close, slowed by evacuation

2019-05-19 23:00    Investing

Iraq oil minister says deal with Exxon close, slowed by evacuation Commodity News

© Reuters. Iraqi Oil Minister Thamer Ghadhban speaks to the media at the ministry's headquarters in Baghdad

JEDDAH, Saudi Arabia (Reuters) - A major oil deal between Iraq and Exxon Mobil (NYSE:XOM) was "very close" but had been slowed by Exxon's decision on Saturday to evacuate its international staff from the West Qurna oil field, Iraq's Oil Minister Thamer Ghadhban said on Sunday.

"Had we concluded we would have signed a heads of agreement," he said, referring to a preliminary document that would set out terms of cooperation on the South Integrated Project. "But now they are out of the country, why should I run after them?" he said at an oil meeting in Jeddah.

Iraqi oil officials say Exxon evacuated all of its foreign staff from the West Qurna 1 field on Friday and Saturday, about 60 people. The U.S. oil major has a long term contract to improve the field.

Its evacuation came days after Washington sent non-essential staff home from the U.S. embassy in Baghdad over what it said was a security alert caused by threats from Iran, which has close ties to Shi'ite militia groups operating in Iraq.

The United States is ramping up sanctions pressure on Iran, especially over oil exports. Iraq relies heavily on natural gas from Iran for its electricity supply, which is stretched during hot summer months.

Ghadhban said there were a number of ways Iraq could compensate in case Iranian gas supplies were reduced, including using gas oil stores in some power plants, but so far there had been no change in supplies.

Ghadhban separately said Iraq has almost 5 million barrels per day of oil capacity, with a current surplus capacity of around 400,000 bpd

"We are [producing] around 4.5 mln bpd, which is our production rate that we agreed to in December last year," he said.

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