The deal, supported by a $200 million advance on a prospective signing bonus, marks a significant push by Washington to regain influence in Iraq. Chevron’s potential takeover of West Qurna 2—a field holding roughly 14 billion barrels of reserves—is part of a broader set of agreements signed in February. These include plans to develop the Nasiriyah supergiant, exploration blocks in Dhi Qar province, and the Balad oil field.

Iraq remains a critical energy prize, with official crude reserves estimated at 145 billion barrels and some of the world’s lowest extraction costs at $1-2 per barrel. Beyond the reserves, the country’s strategic location acts as a gateway to Mediterranean and European markets, while its role in the regional power balance between Shia and Sunni interests makes it a focal point for global competition. Following the U.S. withdrawal from the Iran nuclear deal, China and Russia had previously expanded their footprint in the region, with Beijing securing control over substantial portions of Iraq’s production capacity.

However, the transition faces hurdles tied to Iraq’s history of corruption and governance challenges. Transparency International has long ranked the country among the world’s most corrupt, citing issues ranging from procurement scams to bureaucratic bribery. These risks previously prompted companies like ExxonMobil to exit major infrastructure projects. Consequently, Chevron is navigating the finalization of commercial terms with caution, aiming to move production at West Qurna 2 toward an expected peak of 800,000 barrels per day. CEO Mike Wirth indicated that finalizing the definitive, long-term contract remains several months away.