U.S. energy behemoth,
) is expected to trim its holdings in the the West Qurna-1 oil
field in Iraq. The company currently holds the majority stake of
60% in the field while a minority stake of 15% is being held by
Royal Dutch Shell plc
). Located in the south of Iraq, near the city of Basra, the West
Qurna oil field has estimated reserves of 8.7 billion barrels.
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The move towards dilution of stake will serve the dual purpose of
making funds available for the development of the oil field along
with taking steam out of the ongoing political tussle over the
ownership of the field.
ExxonMobil's participation in West Qurna remains contested as the
Iraqi authority is concerned over the company's venture to tap
reserves in the country's semi-autonomous Kurdistan region. The
U.S. super major turned out to be the first among the oil giants
to gain entry into Kurdistan, after it signed a deal in Oct 2011
to explore six areas. But the signing of this contract annoyed
the Baghdad government as it considers the pact as illegal.
In the revamped setup for the oilfield, ExxonMobil will continue
to remain the operator while new partners- China's biggest energy
PetroChina Co. Ltd.
) and Indonesia's state-owned Pertamina - would join the fray.
Production from the field is expected to rise to 540,000 barrels
per of oil per day (BPD) by mid 2013 from the current 480,000
BPD. With 36 new wells scheduled to come online by the end of
2013, production will likely reach 600,000 BPD. It will
eventually hit 900,000 BPD in 2015.
Exxon Mobil is the world's largest publicly traded oil company,
engaged in oil and natural gas exploration and production,
petroleum products refining and marketing, chemicals manufacture,
and other energy-related businesses. Approximately 83% of Exxon
Mobil's earnings come from its operations outside the U.S.
Exxon Mobil is one of the world's best-run integrated oil company
given its track record of superior returns on capital employed.
The energy giant has long been a core holding for investors
seeking a defensive name with continued dividend growth. Exxon
Mobil is fairly active in its investment program. The company
plans to spend about $185 billion over the next five years, up
29% from the last five-year period.
Capital expenditure covers as many as 21 important oil and gas
projects currently under the anvil and are estimated to
accumulate over 1 million net oil-equivalent barrels per day by
2016. It includes the Kearl Oil Sands development project in
Canada, four in West Africa and Kashagan Phase 1 in Kazakhstan.
Exxon is also engaged in a large liquefied natural gas project in
Papua New Guinea, which is expected to begin deliveries in 2014.
It will unearth more oil from the development of the Hebron oil
field, off the shore of Canadian provinces Newfoundland and
Labrador. The development will help in recovering over 700
million barrels of oil and the platform is expected to yield its
first oil towards the end of 2017.
Exxon Mobil holds a Zacks Rank #3 (Hold). However, in the near
term, stocks like
Abraxas Petroleum Corp.
), with Zacks Rank #1 (Strong Buy), are expected to outperform
the market over the next few months.