Oxy Set To Quit Iraq’s Zubair After Payment Frustration

US mini-major Occidental is looking to sell its 29.69% stake in Iraq’s 320,000 b/d Zubair field. Zubair operator Eni has 41.56%, Korea's Kogas 23.75% and the South Oil Company 5%.

Iraqi Oil Ministry spokesperson ‘Asim Jihad, says Oxy notified the ministry of its intention to sell and that the sale will be ratified. Oxy declined to comment. Mr Jihad says that South Oil Company is to buy Oxy’s share. Given the parlous state of Iraq’s economy, it is unclear how it will be able to finance the purchase (see p5).

A key driver of Oxy’s divestment is unreliable payments from Baghdad. CEO Stephen Chazen told a 28 October investors call, “I really don't want to get into a discussion about the contract terms there, except to say that in theory, you get your money back [with] a small profit pretty much as you spent the money, maybe a quarter or two off. And that hasn't exactly happened.”


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