Chevron plans to sign agreements with the Iraqi government to develop two significant oilfields, Nassiriya and West Qurna-2, and a pipeline project. The West Qurna-2 field currently produces approximately 460,000 barrels a day. The pipeline is designed to cross through Syria and into Turkey, mirroring Chevron's existing system between Kazakhstan and Russia, and aims to reduce global reliance on the Strait of Hormuz.
These deals come after a meeting between Iraqi Prime Minister Ali Al-Zaidi and U.S. President Donald Trump at the White House, followed by discussions between Al-Zaidi and Chevron executives in Houston. The Trump administration has been encouraging U.S. oil and gas companies to expand their international presence in geopolitically strategic countries. The proposed pipeline is especially significant given that the Strait of Hormuz has been largely closed since the war began on February 28, disrupting over 20% of global petroleum product flow.
Iraq, which was the second-largest OPEC producer before the war, has seen its crude production cut by 60% due to its heavy reliance on the Strait of Hormuz for oil exports. This new pipeline could offer a lucrative alternative for both Chevron and Iraq, potentially weakening Iran's negotiating position with the U.S. for a ceasefire. U.S. officials are actively supporting discussions regarding a pipeline from Iraq to Syria's western coast to bypass the Strait of Hormuz, with the Kirkuk to Baniyas pipeline being a primary focus for rebuilding, despite significant reconstruction costs and security challenges in regions like western Anbar province and eastern Syria where Islamic State cells are active. Chevron has been in talks with Iraq for over a year regarding potential projects and has signed several preliminary agreements, though final contracts are not yet complete, according to Clay Neff, President for Upstream at Chevron.
The U.S. government, through special envoy Thomas Barrack, is facilitating talks with Iraqi and Syrian officials, and companies like Chevron, TotalEnergies SE, TI Capital, and UCC Holding, to revive a long-defunct pipeline. The Syrian port of Baniyas is being considered as an expanded export gateway. The total economic agreements between Iraq and the U.S. are anticipated to reach $60 billion. Iraq is also exploring options for leaving OPEC in the future, following the UAE's departure in May, driven by the ongoing conflict and the need to secure more reliable export routes.
