U.S. oil major
) has proposed to divest over 50% of its 60% stake in Iraq's West
Qurna-1 oilfield project to China's biggest energy firm,
PetroChina Co. Ltd.
), and Indonesia's Pertamina. The deal is likely to be completed
in another two to three weeks.
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As per Reuters, ExxonMobil intends to sell 25% of its stake to
PetroChina and 10% to Pertamina. The company, operator of West
Qurna-1 oilfield, had offered to sell its entire stake in 2012,
following a conflict with Baghdad over contracts it signed with
autonomous Kurdistan. These deals were considered illegal by the
The company had set aside $50 billion for the development of the
field which currently yields just below 500,000 barrels per day.
Later, as the oil major planned to make more investments for the
project, it decided to retain part of its stakes.
A final agreement is subject to ExxonMobil getting improved terms
for its technical service contract at West Qurna-1. Though
investments in southern Iraq face tough terms and narrow margins,
Baghdad has offered to sweeten the deal, according to sources.
However, details have not been disclosed.
ExxonMobil is the world's best-run integrated oil company given
its track record of superior return on capital employed. As the
largest publicly traded oil company, ExxonMobil has long been a
core holding for investors seeking a defensive name with
continued dividend growth.
ExxonMobil carries a Zacks Rank #3 (Hold). However, there are
other Zacks Ranked #1 (Strong Buy) stocks in the oil and gas
Range Resources Corp.
) - that appear more rewarding in the short term.