According to local press, the company is reportedly in talks to return to Iraq after it exited the largest oil field in 2023. Plus, Saipem and Subsea 7 to merge.
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Wednesday, 30 July, 2025 / Edition 69

When Chloe Kelly confidently booted in the last penalty shot last Sunday, England repeated as European women's soccer champions. Like many who watched the final, I thought Spain was actually the stronger side technically. England, on the other hand, had the stamina to first overcome a 0:1 Spanish lead to tie the game at 1:1; and then its goalie Hannah Hampton magically stopped 3 Spanish penalties. What a game!

 

Now, on to two pieces of energy news from last week.

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Shangyou Nie

 

Editor, Well Read

ExxonMobil in Negotiations to Re-enter Iraq

Iraq-flag-pumpjack

esfera/Shutterstock

ExxonMobil is reportedly negotiating to re-enter Iraq, after it exited the largest oil field in 2023. Chevron is also reportedly trying to enter the country. This is the latest indication of intensifying growth competition for international oil companies.

 

The latest

  • According to local press Zawya, ExxonMobil is negotiating with Iraq to return to the country.

  • “ExxonMobil has conveyed its willingness to return to Iraq,” said Bassim Khudair, an undersecretary of Iraq’s Oil Ministry, according to Iraq press.

  • ExxonMobil “is currently in a stage of negotiations with Iraq for a new opportunity in the country’s oilfields… these moves are a positive indication of growing interest in Iraq’s oil industry by the US and other companies,” added Khudair.

  • It is unknown which field(s) ExxonMobil might be targeting this time.

  • The undersecretary also revealed that Chevron is negotiating with Iraq to develop the Southern Nasiriyah and Balad oil fields. If successful, that will be the first time that Chevron has entered Iraq in recent years.

Background

  • Iraq is the world’s 5th largest reserve holder with 145 billion barrels of oil. 

  • Recently, Iraq’s importance as an accessible major resource holder has risen because

    • Three countries with the highest oil reserves, Russia, Venezuela, and Iran, are politically stranded.

    • Saudi Arabia, OPEC’s biggest player, is not accessible, as its powerful national company, Saudi Aramco, is the sole equity holder.

    • There are signs that US shale production may have peaked.

    • More IOCs are re-focusing on oil and gas assets.

  • Iraq is also the world’s 5th largest oil producer with 4.4 million barrels per day after the USA, Saudi Arabia, Russia, and Canada.

  • Iraq wants to increase its oil production to 6 million barrels of oil per day by 2028.

  • According to Robin Mills, a Middle East specialist, Iraq has tried to improve its fiscal terms since its 5th Bid Round.

  • BP signed the agreement to develop the Kirkuk oil field in March 2025.

  • TotalEnergies (45 percent) and partners QatarEnergy (25 percent) and Basrah Oil Company (30 percent) are developing the Gas Growth Integrated Project (GGIP) in Iraq.

  • Another US company, HKN, signed a Memorandum of Understanding last week with Iraq for an oil field in Iraq’s Kurdistan region.

ExxonMobil and Iraq

  • In November 2023, ExxonMobil transferred the operatorship to PetroChina for the West Qurna 1 oil field.

  • ExxonMobil exited Iraq, in part due to tough fiscal terms, similar to Shell’s withdrawal from Majnoon in 2018.

  • ExxonMobil submitted a notice to exit the West Qurna 1 field in 2021 when the world was still coping with the COVID-19 pandemic, a weakened global economy, and lower energy demand.

  • ExxonMobil’s 32.7 percent stake in the field was taken up by the Iraqi government (22.7 percent) and Pertamina of Indonesia, which doubled its stake to 20 percent.

  • According to Upstream, the West Qurna 1 field has 22 billion barrels of recoverable oil.

  • PetroChina (operator, 32.7 percent) is producing 550,500 barrels of oil per day from the field and wants to double to 1.2 million barrels per day by 2035.

  • PetroChina’s partners in the field include Basra Oil (22.7 percent), Pertamina (20 percent), Itochu (19.6 percent), and Oil Exploration (5 percent).

Chevron and Iraq

  • When ExxonMobil and Shell won the developments for the West Qurna and Majnoon fields in 2010, Chevron chose not to participate in that bid round.

  • Relative to other IOCs, Chevron has a small footprint in the Middle East, without upstream equity in Qatar or the UAE.

  • Chevron’s main Middle East holding is the 50 percent interest in the Partitioned Zone between Saudi Arabia and Kuwait.

🚨 Trend alert

  • ExxonMobil and Chevron’s attempts to (re)enter Iraq are the latest signs for IOCs to position for overseas oil/gas assets.

  • Many countries are trying to improve their fiscal terms to (re)attract investors back to their country.

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Saipem and Subsea 7 to Merge

SAIPEM

N. Rotteveel/Shutterstock

On 24 July, Italy’s Saipem and Norway’s Subsea 7 announced that they had entered into a binding merger agreement. The new company will be named Saipem7, to be headquartered in Milan, Italy.

 

About the merger

  • The two companies signed an initial Memorandum of Understanding on 23 February 2025.

  • Saipem has a market cap of $5.5 billion, Subsea 7 $5.8 billion

  • The merger is estimated to be completed in the second half of 2026.

  • Mr. Kristian Siem from Subsea 7 will be appointed as Chairman of the Board for Saipem7, while Mr. Alessandro Puliti from Saipem will be the new CEO.

By the numbers

  • Saipem7 will have a portfolio in 60 countries.

  • The combined company will have a revenue of around $25 billion, with a backlog of $43 billion.

  • Portfolio diversification is a key feature in the combination, as “no single country contributing more than 15 percent of total (backlog).”

  • Saipem7 will have around 44,000 employees, including 9,000 engineers and project managers.

  • Annual synergy savings from the combination are estimated at around 300 million euros (or $350 million).

After the merger

  • “The highly complementary geographical footprints, competencies and capabilities, vessel fleets and technologies will benefit Saipem7’s global portfolio of clients,” said the two companies in their official statements.

  • Saipem7 will have four divisions: Offshore Engineering & Construction, Onshore Engineering & Construction, Sustainable Infrastructures, and Drilling Offshore.

  • Saipem7 can provide a “full spectrum” of offshore and onshore services from drilling, engineering and construction, through to decommissioning.

  • Saipem7 will be traded on the Milan and Oslo stock markets.

  • The Subsea 7 brand will remain as “Subsea7, a Saipem7 Company”, headquartered in London.

  • Saipem7 and Subsea7 shareholders will own 50 percent of the new company.

  • According to the official press release, Saipem7 commits to return “at least 40 percent” of its Free Cash Flow to its shareholders.

🚨 Trend alert

  • As oil prices continue to struggle around $65 per barrel, service companies might choose to combine to save costs to compete.

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