Sanctions pressure on Russian companies is intensifying significantly. The Iraqi government has announced that the West Qurna-2 oil field, previously controlled by Lukoil, will now be under temporary management by the state-owned Basra Oil Company, with plans to subsequently transfer operations to other firms.

"Lukoil's 75% stake in West Qurna-2 represented its largest foreign asset, now effectively lost due to compliance with US Treasury deadlines."

The Situation Unfolds

Iraq's Cabinet of Ministers has approved plans to nationalize operations at the West Qurna-2 oil field, one of the world's largest reserves. This move aims to prevent disruptions resulting from US sanctions against the Russian energy giant Lukoil.

Under the new arrangement, the state-owned Basra Oil Company will manage the oil field for an initial period of 12 months. This development follows the US Department of the Treasury's deadline of January 17 for Lukoil to divest its foreign assets.

480,000 Barrels per day
10% Of Iraq's total production
15% Of Iraq's oil exports
75% Lukoil's previous stake

Production Impact and Investment

Lukoil had provided essential investments for developing the West Qurna-2 field, which produced approximately 480,000 barrels per day. This output accounted for 10% of Iraq's total crude oil production and 15% of the country's oil exports.

Following the imposition of US sanctions in autumn 2025, oil production resumed only partially. The company now faces the effective loss of its most important foreign asset. Attempts to replicate the strategy Lukoil employed in the Balkans—selling property to a friendly company—are unlikely to succeed in this case.

Failed Deal and New Contenders

Initially, plans were made to sell West Qurna-2 to Gunvor, a Swiss fund with Russian connections. However, this transaction was blocked by American authorities. Currently, major energy corporations Chevron and ExxonMobil are reportedly interested in acquiring this asset.

Saudi Interest Emerges

Other potential contenders have also emerged. Notably, the private Saudi energy company Midad Energy, which maintains a presence across the Middle East, including operations in Algeria's Illizi basin where they hold a $5.4 billion contract with the state company Sonatrach.

The transition represents a significant shift in control over one of the world's most productive oil fields, with geopolitical implications extending beyond corporate ownership to international energy security and regional influence.