Royal Dutch Shell is considering exiting its positions in Iraqi oil fields, according to industry sources cited by Reuters.
Shell, which declined to comment, is the world’s top liquefied natural gas producer, and is only exiting its oil field assets in Iraq, not its gas field assets. Iraq accounted for 4.4 percent of Shell’s total oil and gas production in 2015.
The fields in question are the Majnoon field, in which Shell holds a 45 percent interest, and the West Qurna field. Majnoon produces an average of 200,000 barrels per day, according to Shell’s website.
Industry sources say that Shell has reaped limited financial benefits after being in Iraq for more than a century, because it has limited control over the production strategy, but it’s likely that Shell is focused on exiting its Iraq position as part of a larger divestment strategy on a global scale.
Just a week ago, Shell announced that it was considering a partial divestment of its $3 billion Norway business---a belt tightening measure aimed at reducing its debt load after its massive $54 billion BG Group acquisition. Shareholders are apparently pressing the oil major to speed up its colossal $30 billion divestment plan, which was supposed to wrap up by 2018, with $6-$8 billion expected to be cut in 2016.
Other North Sea assets were also on Shell’s chopping block recently, with Shell taking bids last month for its Buzzard field, valued at $2.2 billion—an asset it acquired during its purchase of BG Group.
Between January 2015 and May 2016, Shell has laid off over 12,000 employees, in part due to its merger with BG group, and in part due to the lower oil price environment. At the end of 2015, Shell employed 90,000 people worldwide.
By Julianne Geiger for Oilprice.com
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