By Micah Jonah
January 8, 2026
The Iraqi cabinet has approved nationalizing petroleum operations in the West Qurna 2 oilfield, one of the world’s largest, following provisions in the service contract with Russia’s Lukoil.
The state-run Basra Oil Company will manage local staff salaries, operational expenses, and payments to subcontractors, using an account linked to the Majnoon oilfield to facilitate funding. Production at West Qurna 2 continues at around 465,000 to 480,000 barrels per day.
The takeover aims to prevent potential disruptions in oil output caused by U.S. sanctions on Lukoil, which declared force majeure in November. Lukoil’s 75 percent stake in West Qurna 2 was its largest foreign asset.
The field accounts for roughly 0.5 percent of global oil supply and 9 percent of Iraq’s total output, making it a critical component of the OPEC member’s production portfolio.
Iraq is exploring investor interest to sustain operations, with bids reportedly coming from Exxon Mobil, Chevron, and private equity firms.
The nationalization reflects Baghdad’s efforts to secure oil production stability amid international sanctions on key foreign operators.
