Herbert Smith Freehills on PetroChina Iraq Deal
Herbert Smith Freehills has advised PetroChina Co. Ltd. on the purchase of a 25 percent stake in an Iraqi oil field from Exxon Mobil Corp.
Though terms of the deal were not disclosed, Bloomberg has reported that Exxon’s 60 percent stake in Iraq’s West Qurna-1 oil field could be worth $3 billion, meaning the interest bought by PetroChina would be worth $1.25 billion.
Exxon is reducing its stake in West Qurna-1 from 60 percent to 25 percent. In addition to its sale to PetroChina, the U.S. oil giant is also selling a 10 percent stake to Indonesian state-owned oil and gas company PT Pertamina. Royal Dutch Shell plc. and Oil Exploration Co. of Iraq will continue to hold 15 percent and 25 percent of the field, respectively. Developed since 2009, West Qurna-1 produces 600,000 barrels of oil per day.
PetroChina said in a statement that the deal will “achieve synergies with its other projects in Iraq” and allow it to “develop a larger and stronger presence in the upstream operations in the Middle East.” CNPC also owns 37 percent of Iraq’s Rumaila oil field, which produces 1.3 million barrels per day.
Hong Kong partner Hilary Lau, Doha partner Neil Brimson and London partner Isaac Zailer led the Herbert Smith Freehills team advising PetroChina. Exxon was represented by in-house counsel.