Iraq approves 'amicable settlement' with Russia's Lukoil over transfer of operations of giant field

CAIRO, Feb 17 (Reuters) - The Iraqi cabinet approved on Tuesday an "amicable settlement" with Russia's Lukoil LKOH.MM over the transfer of operations of the giant West Qurna 2 oil field to the state-run Basra Oil Company, according to a statement.

Last month, Iraq nationalised the oilfield after the U.S. imposed sanctions on Lukoil to put pressure on Russia to end its war in Ukraine.

West Qurna, which is one of the world's largest oilfields, accounts for about 0.5% of global oil supply and nearly 10% of Iraq's output.

The nationalization of West Qurna 2 oil field comes as talks continue with U.S. oil major Chevron CVX.N over the field.

Lukoil has until February 28 to sell its assets under the U.S. sanctions.

Three sources told Reuters last month that Chevron and the Iraqi oil ministry are in talks on improving the contractual terms. Any deal on new terms would require Iraq's cabinet approval, two of the three sources said.

A deal for Chevron in West Qurna 2 would mark a further push into Iraq for the U.S. oil major after it agreed to develop several fields in the country as part of an international expansion since completing a deal to acquire U.S. oil producer Hess for $53 billion in 2025.

Basra Oil Company has taken over the field's operations for 12 months while waiting for the ownership issue to be resolved, two officials at the firm told Reuters.