UK-Dutch oil major Shell has awarded Dubai-based oil field services company Petronor a contract to provide offices and accommodation at its planned Iraq Energy City in the southern province of Basra.

The city will provide working and living space for 5,000 residents from oil field service firms and contractors and act as a base for operations in southern Iraq, according to a 12 May press release.

The area is located on land leased from the Oil Ministry, near state-owned South Oil Company’s (SOC) Bergessia base and Basra airport.

“Iraq Energy [City] will grow from camp accommodations to permanent structures for offices, warehouses, workshops and yards. In later development phases, the addition of apartment buildings, hotels, recreational facilities, retail outlets and schools will enhance the living experience for workers and their families,” says the release.

Petronor did not disclose the value of the contract.

Shell and its consortium partner, Malaysia’s Petronas, were awarded technical service contracts for the 12.6-billion-barrel Majnoon field in Iraq’s second oil field licensing round in December 2009. The firms agreed to raise production to 1.8 million barrels a day (b/d) over seven years, from the current 45,000 b/d, in return for $1.39 a barrel.

The consortium expects to spend $12-15bn on subsurface work and $15bn on facilities. The development of the field will include drilling 1,000 wells for production and another 500 wells for water injection, requiring 20-30 rigs. Drilling by the US’ Halliburton is expected to begin in June 2011 (MEED 26:4:10).