After months of negotiations, Shell has agreed to hand over its stake in Iraq's large Majnoon oil field to state-held Basra Oil Company by the end of the first half next year, two officials close to the talks told Reuters on Wednesday.
At the Majnoon oilfield near Basra in southern Iraq, Shell is currently 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 emerged in September that Shell had decided to sell its interest in the Majnoon field 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," Reuters reported back then, citing a letter of Iraq's oil ministry to Shell dated August 23 and signed by Oil Minister Jabbar Al-Luiebi.
At the beginning of last month, Al-Luiebi said that Chevron and Total SA were interested in working at Majnoon, but no talks with the U.S. or French company had taken place since Iraq was still in talks with Shell.
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Now, according to the Iraqi oil officials who spoke to Reuters today, Shell and officials from Basra Oil Company reached a deal on Monday on how the oil supermajor would hand over the operations.
"We agreed that eight months is quite enough time for Shell to finish preparations to exit Majnoon. Basra Oil Company will take over operations," one official told Reuters.
According to another Iraqi oil official, Iraqi workers that Shell has hired and trained will continue to work at the field, although operations could be handled by the Iraqi state firm or by another foreign company.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More