Due to recent US sanctions against Lukoil, a Russian oil company with a significant investment in Iraq’s oil fields, the Iraqi government claims it can no longer cooperate with the company. According to Oil Ministry spokesman Abdul Sahib Bazoun al-Hasnawi, Lukoil has informed Iraq’s national oil company SOMO that it is claiming force majeure, citing uncontrollable conditions for its inability to execute its contract.
The massive West Qurna-2 field in southern Iraq, which generates more than 400,000 barrels of crude oil per day, is owned 75% by Lukoil. Its foreign assets are worth nearly $20 billion. Industry observers claim that Lukoil’s international assets are now in jeopardy after the US Treasury intervened to prevent the corporation from selling its abroad operations to an Austrian-based business last week.
According to Ali Nizar al-Shatari, director general of Iraq’s State Oil Marketing Organization, or SOMO, businesses operating in the country “must be completely free from any operations, suspicions, or sanctions that may be issued…” by the US Treasury or even the European Union.
Al-Shatari stated in a video statement last week that all payments for exported oil and petroleum products are handled via the SWIFT (international transactions) system, which forbids involvement by sanctioned or high-risk firms.
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