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Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors

Iraq

Iraq’s giant Majnoon oilfield has attracted the attention of British Petroleum and Italian Eni, according to Iraqi officials who spoke to Reuters on Monday.

Royal Dutch Shell is slated to exit the play in southern Iraq by June 2018, paving the way for other oil majors to take its place. American Chevron and French Total had both been eager to work on Majnoon as well, Oil Minister Jabbar al-Luiebi said last month.

The field’s reserves are estimated at 38 billion barrels of crude oil.

Reports emerged mid-September that Shell was looking to quit the field, but al-Luiebi claimed that negotiations between Baghdad and Shell over the field were ongoing, and that it was not in talks with other companies.

One oil official close to the matter, according to Reuters, said that BP and Eni had approached the oil ministry in October to express interest in developing Majnoon after Shell quits it. Neither European oil giant was available for immediate comment, though two other officials in Baghdad confirmed the companies’ interest.

BP is already developing the nearby Rumaila field in Iraq, which sits to Majnoon’s south in Basra. The play currently produces 1.45 million barrels per day.

Eni operates the Zubair oilfield, which is sandwiched in between Majnoon and Rumaila. It currently produces 430,000 barrels per day.

Iraq’s state oil companies will continue work on Majnoon even without a foreign partner in the mix, come June 2018.

Related: OPEC Chairman: Output Cuts Are The ‘’Only Viable Option’’

“The oil minister Luaibi will directly supervise the operations in Majnoon after Shell leaves to make sure operations will not be disrupted,” said an Iraqi oil official.

Iraq is still eager to boost its oil revenues, which are still insufficient for reconstructing of the country, according to Iraqi Prime Minister Haider Al-Abadi.

Iraq proclaimed itself victorious earlier this year after a three-year, hard-fought war against the terrorist Islamic State. The victory freed up some money—but not enough—for reconstructing the nation after almost 15 years after the demise of dictator Saddam Hussain and the fall of his regime.

The oil price crash of 2014 has made it difficult for fossil-fuel dependent countries to provide key government services to its citizens, and Iraq was not immune. In Iraq, years of financial mismanagement and domestic conflict exacerbated existing civil governance issues.

By Zainab Calcuttawala for Oilprice.com

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