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The Oil Markets Are At A Confusing Crossroads

The Oil Markets Are At A Confusing Crossroads

The latest IEA report suggests…

Chevron, Total Waiting In The Wings As Shell Mulls Majnoon Exit

Oil

Chevron and Total SA are interested in working at Iraq’s Majnoon oil field that Shell says it wants to exit, but no talks with the U.S. or French company have taken place since Iraq is still in talks with Shell, Iraqi Oil Minister Jabbar Al-Luiebi said on Monday.  

“Until now, we are still in talks with Shell, and no decision has been made in relation to exiting the Majnoon field,” Bloomberg quoted Al-Luiebi as telling reporters in Baghdad.

Iraq hopes to “reach a satisfactory deal for the two parties,” according to the minister.

As early as in November last year, Shell was said to be considering its exit from Iraqi oil fields, including divesting its 45 percent stake in the Majnoon field as part of a wider divestment strategy.  

At the Majnoon oilfield near Basra in southern Iraq, Shell is the operator and holder of a 45 percent stake, with Malaysia’s Petronas owning 30 percent, and Iraq’s Missan Oil Company holding the remaining 25 percent. The oilfield started production in 2014 and now produces an average of 210,000 bpd, according to Shell’s website.  

Reports resurfaced last month that Shell had decided to sell its interest in Majnoon after the oil major and Iraq failed to agree on future production plans and investments budgets.

“We respect your desire and decision to seek an acceptable end of Shell Iraq Petroleum Development SIPD’s interest in Majnoon,” reads an oil ministry letter dated August 23 and signed by al-Luiebi, and seen by Reuters.

Related: Failed Oil Price Recovery Slams Energy Stocks

A couple of weeks later, al-Luiebi said that negotiations between Baghdad and Shell regarding the company’s possible exit from Majnoon were still going on, and the government had not yet begun to talk about the field’s operation with other companies.

In an emailed statement in mid-September, Shell said, as carried by Platts:

“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.”

By Tsvetana Paraskova for Oilprice.com

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