US supermajor ExxonMobil could sell off its stake in Iraq’s giant West Qurna 1 onshore oilfield as it plans to reduce debt and increase cash flow in a market that has been battered by a global pandemic and low crude oil demand.

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Iraq’s Oil Ministry said on Thursday it is in discussions with US-based oil companies for a potential purchase of ExxonMobil’s shares in West Qurna 1.

However, it did not identify which companies may be interested in buying the stake, and no further details were provided.

ExxonMobil has a 32.7% stake in West Qurna 1 in southern Iraq, near the city of Basra, with the stake likely to be valued at around $500 million, Bloomberg reported.

The other key stakeholders in West Qurna 1 include PetroChina on 32.7%, Japan’s Itochu on 19.6% and Indonesia's Pertamina on 10%.

ExxonMobil posted a loss of $22.4 billion last year, significantly higher than 2019's $14.3 billion loss.

The huge loss was mainly due to impairments on its natural gas assets in the US, Canada, and Argentina last year.

Asset sales are believed to be a key part of ExxonMobil’s strategy to reduce its mounting debt, as well as maintain its $15 billion-per-year hefty dividend.

ExxonMobil’s overall strategy through to 2025 is to increase earnings and cash flow to sustain and grow its dividend, reduce debt and fund advantaged projects while working to commercialise lower-emission technologies in support of the goals of the Paris Agreement.

West Qurna 1 is said to be one of the world’s largest oilfields, with expected recovery reserves totalling than 20 billion barrels.

However, the field requires significant investments that includes a major water-injection project, which has been hit with multiple delays, Bloomberg reported.

ExxonMobil earlier this year exiting a key exploration block in the Kurdistan region of Iraq that it once operated after striking a deal with Oslo-listed independent DNO.

The US-giant had agreed to sell its remaining 32% stake in the Baeshiqa block to Norway's DNO for an undisclosed amount.