Shell signs up to develop Iraq's Manjoon field

18 January 2010

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.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.