Peter Schiff highlights the parallels…
Despite tightened budgets, frontier drilling…
A consortium of French Total, Petrochina, and Chevron could take over the operation of the Majnoon field from Shell, which earlier this year said it will be exiting the project. That’s what Iraq’s Oil Minister Jabbar al-Luaibi said today in Vienna ahead of OPEC’s already notorious meeting regarding an extension of the oil production cuts the cartel agreed to last year.
On Monday, Reuters reported that another Chinese giant, CNPC, had shown interest in developing the field. Last week, BP and Italy’s Eni were also reportedly interested in taking part in the field’s development.
The Anglo-Dutch company will wrap up and hand the reins over to Iraqi Basra Oil Company by the end of June next year. Reports about Shell’s plans to quit its Iraqi oilfields, including the divestiture of its stake in the Majnoon field, first appeared last November. The sales were to be part of a wider divestment strategy, prompted by Shell’s acquisition of BG Group, which swelled its debt load.
Back then, Shell was mulling the sale of only its oilfield interests, and was set on keeping its natural gas fields in Iraq. At the Majnoon oilfield, near Basra in southern Iraq, Shell is the operator and holder of 45 percent, with Malaysia’s Petronas owning 30 percent, and Iraq’s Missan Oil Company holding the remaining 25 percent.
Related: Qatar Just Ran Out Of This Unlikely Natural Resource
The oilfield started production in 2014 and now produces an average of 210,000 bpd, according to Shell’s website. According to Iraqi oil officials who spoke to Reuters in September, the current production is around 235,000 bpd. The field’s reserves have been estimated at 38 billion barrels of crude oil, and the initial production plan for maximum output was 1.8 million bpd, at a payment of US$1.39 a barrel for the consortium developing the field.
If Shell quits Majnoon, it will become the first supermajor to pull out of an oilfield project under Iraq’s technical service contract.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.