OilVoice - Shell Welcomes Iraq Majnoon Contract Award

Shell Welcomes Iraq Majnoon Contract Award

Friday, December 11, 2009

The Iraqi Ministry of Oil today awarded Shell and Petronas Carigali a contract for technical assistance in developing the Majnoon field, subject to ratification by the Iraqi authorities.

Shell will operate the Development and Production Service Contract under the terms of the second licensing round for Iraqi oil and gas contracts. As laid out by the Ministry of Oil those terms call for 25% of the participating interests in all licences to be held by the Iraqi State. Shell will hold a 45% share, with Petronas holding 30%.

The consortium bid a plateau production of 1.8 million barrels of oil per day, up from a current level of approximately 45,000 barrels of oil per day. Majnoon is one of the largest oil fields in the world, and Shell and Petronas look forward to developing this world class resource base with its partners.

Shell has already won the right to help ExxonMobil repair the giant West Qurna 1 field, which was part of a previous Iraqi auction round held earlier this year.

A total of 45 companies, including Western giants ExxonMobil Corp. and BP, as well as state-run companies from Asia, are competing for 15 fields that represent about a third of Iraq's 115 billion in proven reserves. The companies must accept 20-year service contracts and receive a flat fee per barrel produced for their services instead of production-sharing contracts, which are considered more lucrative.

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