Iraq’s Ministry of Oil has signed a preliminary agreement with US supermajor Chevron to develop key oil and gas assets, a move aimed at revitalising production in the country's southern Dhi Qar governorate and other strategic areas.

The signing ceremony, held under the auspices of Prime Minister Mohammed Shia al-Sudani, formalises a plan for Chevron to advance four exploration blocks within the Nasiriyah project and to develop the Balad oilfield. The accord was attended by senior officials including Iraq’s Minister of Oil, Hayan Abdul-Ghani al-Sawad, and Chevron’s Vice President, Frank Mount.

The centrepiece of the agreement is the Nasiriyah field, a significant asset with an estimated 4.36bn barrels of recoverable reserves. The Ministry of Oil has previously stated its intention for the field to produce above 100,000 barrels per day (bpd), a substantial increase from its current capacity of 70,000-90,000 bpd, which has been hamstrung by Baghdad’s compliance with OPEC+ output restrictions.

For Chevron, the deal marks a return to a field it vied for in 2009. Negotiations with a rival consortium broke down at that time, primarily over the low remuneration offered by Baghdad. The latest talks were paused in February pending the formation of a new government but have now resumed, signalling renewed momentum. However, operating in the region remains challenging; Dhi Qar Oil Co. (DQOC), the local operator, recently closed operations for a week due to violent protests.

The project is part of a wider strategy to boost the region’s output. As reported by NewsBase when the deal was first mooted in 2020, the long-term aim is to increase production from Dhi Qar towards one million bpd. This upstream push is being supported by other initiatives, including a 20-well drilling campaign by the Iraqi Drilling Co. and the Gas Growth Integrated Project led by TotalEnergies, which will capture associated gas from the Nasiriyah and Gharraf fields.

The agreement also includes the Balad oilfield, located north of Baghdad. This field was among several overrun by militant groups just over a decade ago, underscoring the complex security and operational environment Chevron and its partners must navigate.