Exxon Mobil and Baghdad have reached agreement for the US-based company to be paid in oil for work on the huge West Qurna-1 oilfield, after months of negotiations over contract terms, an Iraqi oil official said. The foreign oil companies involved in Iraq's oil expansion generally prefer to be compensated for capital expenditure and service fees in oil, because cash payments are more complicated to arrange.
BP, which leads the Rumaila project, and Italy's Eni, leader of the Zubair project, had signed up to Iraq's oil sales agreement from the outset, the first step towards being paid in crude. Exxon and minority partner Royal Dutch Shell held out as they sought to tighten up some contractual loose ends, said an industry source.