* PetroChina could take 25 percent stake in West Qurna
* Pertamina could buy 10 percent share
* Exxon would remain operator
By Charlie Zhu and Peg Mackey
HONG KONG/LONDON, Aug 22 China and Indonesia are
set to join Exxon Mobil's $50 billion project to develop Iraq's
West Qurna-1 oilfield, company and industry sources said on
Various scenarios for farming out Exxon's 60 percent stake
in the giant oilfield are still under discussion, but at this
stage China's biggest energy firm PetroChina is
expected to take 25 percent and Indonesia's state-owned
Pertamina 10 percent, they said.
Exxon would remain operator of the southern field, core to
Iraq' oil expansion plans, though its share could be cut to 25
percent. Royal Dutch Shell would retain its existing 15
China is already the top foreign player in Iraq's oilfields
and such a big stake in West Qurna-1, around 50 km northwest of
the southern oil hub of Basra, would make PetroChina the single
biggest foreign investor in Iraqi oil.
PetroChina confirmed it was in talks for a stake in West
Qurna-1 at its interim results briefing on Thursday, though its
president, Wang Dongjin, did not disclose the size.
"The negotiation is still under way," he told reporters. "We
are likely to conclude the talks within this year."
For Pertamina, the deal could be its largest foreign
acquisition and mark its first move into Iraqi oil and gas
since U.S.-led forces toppled leader Saddam Hussein in 2003.
Iraqi oil would help Indonesia meet soaring fuel demand as
South East Asia's largest economy grows. Former OPEC-member
Indonesia was once itself a big oil exporter, but it is
struggling to arrest declining oil and gas output from its
ageing fields. The country already imports a million barrels a
month of Iraqi oil.
Indonesia's Chief Economic Minister Hatta Rajasa said in
March that Pertamina was interested in buying into the project
and was negotiating a 10 to 20 percent stake.
An Exxon Mobil spokesman declined to comment. A Pertamina
spokesman said he was unaware of the deal.
Last year, Exxon offered to sell its entire 60 percent stake
in West Qurna-1 after a dispute with Baghdad over contracts it
signed with the autonomous Kurdistan in the north, deals which
the central government rejects as illegal.
The U.S. oil company later committed to further investment
at the field - now pumping just under 500,000 barrels a day -
and stepped back from making a full exit, talking to potential
buyers about smaller stake sales.
Iraq's oilfields are the largest in the Middle East open to
foreign investment. The reserves are an alluring prospect for
energy firms seeking to secure future oil supply, despite tough
contract terms imposed by Baghdad.
PERTAMINA IN IRAQ
Iraq and Pertamina signed an oil exploration agreement in
block 3 in Iraq's western desert in 2002, but Pertamina never
started exploration due to the Iraq war.
The Indonesian energy company has tried to revive that deal,
and has also expressed interest in another field.
Pertamina also bid unsuccessfully when Iraq auctioned the
rights to develop its massive oilfields in 2009. Rival Malaysian
state oil firm Petronas was successful and won stakes in four
big Iraqi projects. The bids were part of an aggressive
expansion on to the global stage by Petronas.
Pertamina's overseas ambitions have been more modest. The
firm has investments in Libya, Sudan, Qatar, Vietnam, Australia
Baghdad signed a series of service contracts in 2009 that
committed international oil companies to raising Iraq's oil
output by 2017 beyond 12 million bpd - which is more than Saudi
Arabia produces now.
Infrastructure and security problems have since forced the
government to cut the target to 9 million bpd by 2020. The
issues are so acute Iraq could report a year-on-year output fall
for 2013, its first after two years of robust gains.