By John Lee.

Reuters has reported that both BP and Eni have expressed an interest in developing the giant Majnoon oilfield, which Shell plans to exit next year.

Iraqi oil officials told the news agency that Iraq’s Ministry of Oil has not yet started negotiations with either company.

BP is currently developing the Rumaila field, while Eni operates Zubair.

Shell is expected to hand over Majnoon operations to the state-owned Basra Oil Company by the end of June 2018.

Both Chevron and Total have been previously reported as being interested in taking over the field.

(Source: Reuters)

By John Lee.

Malaysia’s Petronas has reportedly decided to withdraw from its 30-percent participating interest in Iraq’s giant Majnoon oil field.

According to Bloomberg, the decision came as the company considers the returns to be too low. It is expected to hire advisers to help find an interested party to take up the holding.

Shell is also said to be trying to sell its 45-percent stake in the field, following a failure to reach agreement with Iraq’s Ministry of Oil. Both Chevron and Total have expressed interest in the project.

Petronas is currently involved in Iraq’s Badra, Garraf, Halfaya, and Majnoon.

(Source: Bloomberg)

By John Lee.

Iraqi Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] (pictured) has reportedly said that Chevron and Total have expressed interest in developing the Majnoon oilfield.

Oil giant Shell is trying to sell its stake in the field following a failure to reach agreement with Iraq’s Ministry of Oil.

Reuters quotes the Minister as saying that negotiations are continuing with Shell, that he hopes to reach a satisfactory deal for both parties, and that he has not started negotiations with other companies to take over Shell’s stake.

(Source: Reuters)

By John Lee.

Oil giant Shell is trying to sell its stake in the Majnoon oilfield (pictured) in southern Iraq, following a failure to reach agreement with Iraq’s Ministry of Oil.

A Shell spokesman told UAE-based newspaper The National:

“Following extensive discussions with the Ministry of Oil, 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, with the timeline to be agreed in due course.”

Reuters quotes an oil official as confirming that the Ministry failed to reach an agreement with Shell over its Majnoon operations, including production plans and investments budgets. “We think it’s for the interest of all parties that Shell should withdraw,” he added.

A Shell spokesman told Reuters:

“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.”

The company holds a 45-percent share in the project, with Malaysia’s Petronas holding 30 percent, and the Iraqi state-owned Maysan Oil Company having 25 percent.

Output from the field, which commenced production in 2014, is currently estimated at around 235,000 barrels per day (bpd), with a 400,000 bpd target by 2020.

Shell is also seeking to selling its stake in the ExxonMobil-operated West Qurna 1 oil field.

In addition to its oil interests in Iraq, Shell is a key player in the Basra Gas Company (BGC), a joint venture between the Iraq’s South Gas Company (SGC) (51%), Shell (44%) and Japan’s Mitsubishi (5%), which processes gas from the Rumaila, West Qurna and Zubair fields, which would otherwise be flared.

The National also quotes a Shell spokesman as saying that the company remains committed to this, and to its petrochemical project in Iraq:

“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.

(Sources: Reuters, The National)

By John Lee.

The head of an Irish engineering firm has said his company is aiming to increase its work at Iraq’s West Qurna oilfield.

In an interview with John Reynolds for the Irish Independent, Michael Looby (pictured), Founder and Managing Director of ByrneLooby, added:

“Southern Iraq is stable and well-developed. Our clients are very conservative and risk-averse about working there, so it’s de-risked for us in terms of security and operations. They work together with local community tribal leaders … [providing] training to locals and will build facilities like a school or medical clinics in order to give something back to the local community, and we take part in that as well.”

The company has also carried out work at Zubair, Majnoon, and Umm Qasr port.

(Source: Irish Independent)

By John Lee.

According to a report from Bloomberg, the International Energy Agency (IEA) has predicted that Iraq will retain its position as OPEC’s second-biggest oil producer, adding 700,000 barrels per day (bpd) to reach 5.4 million bpd by 2022.

Most of the increase will come from southern oilfields, such as the Shell‘s Majnoon project.

The Paris-based agency also forecasts that neighbouring Iran will increase its oil production capacity by 400,000 bpd to reach 4.15 million bpd by 2022.

(Source: Bloomberg)

By Sara al-Qaher for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News. 

On Feb. 20, the Iraqi Oil Ministry signed a memorandum of understanding with the Iranian Oil Ministry to settle disputes over the joint oil fields and examine the possibility of building a pipeline to export crude oil from the Kirkuk fields, in the north of Iraq, through Iran. The ministry also wants to study moving Iraqi crude oil to the Iranian Abadan refinery.

According to an Iraqi Oil Ministry statement, Iraqi Oil Minister Jabbar al-Luaibi agreed with his Iranian counterpart Bijan Zanganeh during the latter’s visit to Iraq on coordinating their stances in the Organization of the Petroleum Exporting Countries (OPEC) to achieve balance in the global oil markets, support oil prices and study the construction of pipelines to export crude oil from Kirkuk fields through Iran.

Five Iraqi oil fields are situated along the border with Iran: Dehloran, Shahr, Paydar Gharb, Aban and Al Noor. Baghdad and Tehran share the fields of Majnoon, Abu Ghraib, Bazerkan, Al-Fakkah and Khana. These fields contain huge reserves of light crude oil close to the earth’s surface and reserves exceeding 95 billion barrels. This is the largest reserve of hydrocarbons in the Middle East.

On Feb. 2, Iranian companies resumed drilling 20 new oil wells in the southern Azadegan field, which is one of the shared oil fields between Iraq and Iran.

Oil and Energy Committee member of parliament Ahmad Madloul told Al-Monitor that most disputed oil wells are Iraqi, according to the maps that were published before the Iran-Iraq war. But Iran believes otherwise. The agreement will be decisive for settling the dispute. He said, “If a joint committee is not formed, the oil wells will bring bigger problems in the future for both countries.”

He asked that the committee identify, when formed, the proprietorship of the lands first to find out who rightfully owns the oil wells on the shared borders.

By John Lee.

According to a report from Reuters, Anglo-Dutch Shell has signed a $210-million contract with US-based Halliburton to drill 30 wells at the Majnoon field over the next three years.

The contract is expected to raise output at the field from 220,000 barrels per day currently to about 400,000 bpd in three years.

(Source: Reuters)

By John Lee.

Shell is reported to be considering selling its oil fields in Iraq, as part of a global $30-billion asset disposal program.

The move follows the company’s $54-billion acquisition of gas company BG Group earlier this year.

Industry sources told Reuters that Shell has found only limited financial benefits in recent years from its involvement in Iraq’s oil production, where it is paid in crude oil but has limited say on production strategy, but that it continues to see value in developing its gas business in Iraq and is not interested in selling those assets.

Iraq accounted for around 4.4 percent of Shell’s total oil and gas production in 2015, according to its 2015 annual report.

Shell holds a 45 percent stake in the giant Majnoon oil field, that it operates under a technical service contract that expires in 2030. Production at Majnoon has stalled at 200,000 bpd, and although it has plans to double output, the company is just focusing on sustaining production this year.

It also has a 15 percent interest in the West Qurna 1 field (Reuters reports that it has 20 percent interest), which is operated by ExxonMobil.

The Basrah Gas Company (BGC) is a joint venture between the state-owned South Gas Company (SGC) (51%), Shell (44%) and Mitsubishi (5%).

(Source: Reuters)

By John Lee.

Shell and oil trading house Vitol are reported to be stepping up their operations in the port of Fujairah to store Iraqi crude.

Shell, an equity partner in Iraq’s Majnoon oilfield, leased five large crude storage tanks at Fujairah port last year.

Vitol has also started to store crude from Iraqi Kurdistan in Fujairah, to be used in its 82,000 barrel per day (bpd) Fujairah refinery.

(Source: Reuters)