As Royal Dutch Shell prepares to resume operations at Majnoon field in Iraq in May, the supergiant plans to invest more than $1 billion this year to bring production online.
After having shut down last summer for maintenance and to build new production facilities, the Majnoon field will begin produced 100,000 barrels per day in May-a volume the Iraqis hope will be up to 200,000 bpd in no time.
Iraq is in desperate need of a boost in production, which has been hindered by Iraqi Kurdistan's halt of exports from its territory late last year.
The Iraqi central government has a target of 2.9 million bpd on average. By 2017, Iraq hopes to be exporting 6 million bpd.
While other majors (ExxonMobil, Chevron, Total and Russia's Gazprom) as well as a handful of smaller companies have irked Baghdad by signing unilateral oil and gas deals with the Iraqi Kurds, Shell has stayed the course with Baghdad.
According to Reuters, Iraq plans to invest around $130 billion in the upstream sector and $25 billion in downstream projects, plus $18 billion in the gas sector.
What worries observers is the potential conflict scenario as Iraqi Kurdistan pursues its own oil and gas regime with plans for new pipelines by 2014 to bypass Baghdad and transport Iraqi Kurdish hydrocarbons directly to Turkey and then on to European markets.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com More