Deal is part of scheme to boost production to 12 million barrels a day by 2016
A consortium led by the UK/Dutch Shell Group has signed a final contract to develop the Manjoon oilfield in Iraq, after more than a month of negotiations.
Shell will hold a 45 per cent share in the scheme while its consortium partner, Malaysia’s Petronas, will hold a further 30 per cent. State-owned South Oil will hold the remaining 25 per cent. The three signed a final deal to develop the field on 17 January following approval by the country’s Council of Ministers on 5 January. Shell first announced the contract on 11 December 2009.
Under the terms of the contract, the partners will produce a peak volume of 1.8 million barrels a day (b/d) of oil from the field, which Shell describes as one of the world’s largest. The deal is for 20 years. The Manjoon field currently produces 45,000 b/d of oil. Shell and Petronas decline to comment on the value of the sign-up fee they have paid to Baghdad to develop the field.
Iraq awarded deals to seven international oil and gas consortiums in December to add 4.7 million b/d to the country’s daily production capacity (MEED 13:12:09). The contracts are part of a programme to increase Iraq’s oil production capacity to 12 million b/d by 2016 from current levels of around 2.5 million b/d.
Oil output in Saudi Arabia, the world’s biggest oil producer, totalled 10.8 million b/d in 2008 according to the UK’s BP. The kingdom’s oil minister, Ali al-Naimi, says that overall production capacity is 12.5 million b/d.
The second and third biggest oil producers in the world, Russia and the US, pumped 9.9 million b/d and 7.9 million b/d in 2008.