WTI oil seems rangebound as…
Over reliance on oil revenues…
Royal Dutch Shell hit commercial production targets in its Majnoon field in Iraq, allowing it to begin exports. Shell owns a 45% stake in the field and leads a consortium that includes South Oil Co., Petronas, and Missan Oil Co. The field is producing 210,000 barrels per day – more than the 175,000 bpd average that triggers cost recovery.
Iraq awarded the Majnoon field to Shell’s consortium back in 2010. The Majnoon field is one of the largest in the world with an estimated 38 billion barrels of oil, and it is located 60 kilometers from the southern city of Basra. Production started up again in September 2013 after extensive maintenance and construction. Shell had to do minesweeping in a 28 square kilometer area, and also refurbish brownfield facilities to meet safety standards. It has drilled 18 wells in the Majnoon field.
Related Article: Coast Guard Finds Shell to Blame for Kulluk Incident
“This is a historic event for Iraq’s energy industry. The lifting of Shell’s first oil shipment from Majnoon has great significance to us and our partners in the Government as it is a testimony to our shared progress and signals the start of Majnoon’s long-term journey toward generating further revenue for Iraq’s economy, and as an investment in Iraq’s future,” Hans Nijkamp, Vice President and Chairman of Shell in Iraq, said in a press release.
Iraq is hitting milestone after milestone as it ramps up production. In February, Iraq achieved its highest level of oil production in over 30 years, pumping 3.6 million bpd. A major bottleneck was resolved at the Basra export terminal, allowing oil producers to increase production in the south. Iraq is now the second largest oil producer within OPEC, and has ambitious goals to triple output by 2020 to 9 million bpd.
By Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com