“Following extensive discussions with the Ministry of Oil, His Excellency the Oil Minister of Iraq formally endorsed a recent Shell proposal to pursue an amicable and mutually acceptable release of the Shell interest in Majnoon,” a Shell spokesperson said.
Shell and the Iraqi ministry signed a contract to develop the onshore field in January 2010. The supermajor was then awarded a 45% stake as lead operator, alongside Malaysia’s Petronas (30%) and the Iraqi state partner Missan Oil Co. (25% stake).
Developing Majnoon has involved the drilling of new wells, the construction of a greenfield central processing facility — the largest of its kind to be built in Iraq in the last decade — as well as the revamping of brownfield installations.
“Shell and our partners have successfully transformed Majnoon into a world class producing asset both safely and responsibly, with the field producing more than 200,000 BPD,” Shell said on its website.
After an impasse with the government and unfavorable changes to fiscal terms, Shell seeks to exit the oilfield, whose name means crazy in Arabic – a reference to its excessive amount of oil in a dense area. A timeline for the withdrawal is to be agreed upon in due course, the spokesperson said, adding “Shell remains otherwise firmly committed to Iraq.”
Reuters reported Shell is also selling its 20% stake in the West Qurna 1 oilfield, which is operated by ExxonMobil, but the spokesperson declined to comment on it.
“By leaving Majnoon, Shell will be in a stronger position to focus its efforts on the development and growth of the Basrah Gas Company, and the Nebras Petrochemicals Project,” he said, in an emailed statement.
The supermajor began operations in Iraq in 1927 when it discovered the Kirkuk oilfield.