A picture taken on April 17, 2017 shows flames rising from the burning of excess oil at the West Qurna-2 oilfield, west of Basra in southern Iraq. (HAIDAR MOHAMMED ALI / AFP)

Halliburton Co and Exxon Mobil Corp are in talks over the oil company’s stake in the West Qurna-1 field in southern Iraq, the country’s oil minister said.

Iraq supports a US partner for Exxon’s stake in the oil field, Oil Minister Ihsan Abdul Jabbar told reporters in Baghdad. If the talks with Halliburton fail, Iraq will step in to buy the stake, he added. He said a few days ago that Basra Oil Co could also be a potential buyer.

“Basra Oil wants to acquire Exxon stake, but to maintain the balance of partners and market, we support a US partner,“ Abdul Jabbar said.

Iraq also expects the monthly production increase of 400,000 barrels a day for OPEC+ to continue in January, he said, adding that the emergence of the omicron coronavirus variant hasn’t had much of an impact on global oil demand. 

While Halliburton has long been one of Exxon’s primary contractors at the field, taking an actual ownership stake would be a rarity for a company focused on mapping, fracking and rehabilitating assets owned by other companies. West Qurna-1 is a 20 billion-barrel deposit

Halliburton surfaced as a potential buyer of the stake more than a month ago. Iraq is OPEC’s second-biggest producer.

Exxon was among the first Western oil explorers allowed into Iraq in 2010 as the Middle Eastern nation sought to rebuild its oil industry following the fall of Saddam Hussein and years of subsequent fighting. 

Prior to then, Iraq’s crude bounty had been off limits to most foreigners for almost 40 years. Exxon soured on West Qurna amid tough contractual terms, OPEC supply constraints and ongoing political instability. 

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While Halliburton has long been one of Exxon’s primary contractors at the field, taking an actual ownership stake would be a rarity for a company focused on mapping, fracking and rehabilitating assets owned by other companies. West Qurna-1 is a 20 billion-barrel deposit.

Abdul Jabbar also said his ministry is in discussions with Chevron Corp on the economic model of the contract for its investment in the southern city of Nasiriya. He’s expected to sign a deal with Chevron in the first quarter of 2022. 

Iraqi National Oil Co would be Chevron’s partner in the oil exploration investment with a 40 percent stake in the venture. The US oil giant will conduct exploration work in the city, with an estimated daily output of 600,000 barrels for at least 10 years, the minister said.

Iraq is working to create a sovereign energy fund that aims to finance energy projects in the country to cut down energy purchases, according to Abdul Jabbar, adding that the country plans to capture all associated gas flaring that is ranging between 4 billion to 5 billion standard cubic feet per day.

Current gas capturing projects in Iraq are worth $7 billion and Iraq in talks with Qatar to import gas via pipeline and also to invest in any gas pipeline project from Qatar to Kuwait, the minister said.

READ MORE: Iraq to receive bids for developing oil, gas fields in June

Iraq set to award front end engineering designs or FEED work to the US; KBR Inc is part of TotalEnergies SE’s gas capturing deal signed in September and Iraq is currently rehabilitating its export pipeline to Ceyhan that was damaged by ISIS, and is now 85 percent complete, the minister added. 

On climate change, Iraq is committed to change all liquid fuel used for power plants with gas, improve oil refineries and capture all gas for all areas in the country, Abdul Jabbar said.