Shell Looks To Exit Iraq's Majnoon Oil Field

Majnoon field near Basra in southern Iraq

Majnoon field near Basra in southern Iraq

Shell plans to sell off its 20% stake in one of Iraq's largest oil fields, a news report said.

"We respect your desire and decision to seek an acceptable end of Shell Iraq Petroleum Development SIPD's interest in Majnoon", reads the oil ministry's letter that is dated August 23 and signed by Oil Minister Jabbar Al-Luiebi.

In November, industry sources had told Reuters that Shell was considering selling out of its oil fields in Iraq as part of its global US$30 billion asset disposal programme.

"In May 2017, the ministry of oil in Iraq applied the performance penalty and remuneration factor on the Shell operated venture, the Majnoon oil field, which had a significant impact on its commerciality", a Shell spokesman said.

The officials said the oil ministry and Royal Dutch Shell had been discussing investment budgets and production activities but failed to reach a deal. According to Iraqi oil officials who spoke to Reuters, the current production is around 235,000 bpd. "We think it's for the interest of all parties that Shell should withdraw." .

It holds a 45 percent stake in the field that it operates under a technical service contract that expires in 2030.

The news comes on the heels of the company's announcement that it will hand back control of the Majnoon oil field to the Iraqi Government.

Basra Gas is a joint venture between Shell, South Gas Company and Mitsubishi and the Petrochemical Project NEBRAS.

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