Talks with Exxon and PetroChina to develop Iraq’s southern water injection megaproject are progressing. Commercial terms are a (big) sticking point, but if Baghdad can seal the deal, its long-term output targets look far more achievable.

Iraq’s Council of Ministers this week voted in favor of the massive South Iraq Integrated Project (SIIP) following a briefing on the progress of negotiations between the oil ministry and potential partners PetroChina and ExxonMobil.

On paper...