Iraq's giant Majnoon oil field, operated by Royal Dutch Shell PLC (RDSB.LN) will start production later this month at a rate of 175,000 barrels a day, a senior Iraqi oil official said Wednesday.
Iraq
's giant Majnoon oil field, operated by Royal Dutch Shell PLC (RDSB.LN)
will start production later this month at a rate of 175,000 barrels a day, a
senior Iraqi oil official said Wednesday.
Production from Majnoon, believed to hold more than 13 billion barrels of oil,
would reach 200,000 to 250,000 barrels a day in the first quarter 2014, Ali
Nazar, a senior official at state-run Iraqi oil marketing company SOMO, told
reporters on the sidelines of a meeting of energy ministers in
Seoul
.
The 175,000 barrels a day output, which is the level required for the
Anglo-Dutch company to start recovering costs under its deal with the Iraqi oil
ministry, is a critical milestone in Shell's plans to develop the field. Because
Majnoon's existing pipelines aren't big enough to deal with the anticipated
increase in output and old facilities weren't up to international standards,
Shell has had to concentrate its efforts on the necessary upgrades needed
before output at the targeted amount can begin.
Majnoon, located near the city of
Basra
in
southern
Iraq
, is one of four major fields that
Iraq
is developing with foreign companies. These fields are expected to
double
Iraq
's total output that now stands at 3.2 million barrels a day.
"We are happy with the progress of work made by Shell in Majnoon,"
Mr. Nazar said.
Iraq
signed a series of service contracts with major oil companies such as
Shell, Exxon Mobil Corp. (XOM), Total (TOT), BP PLC (BP), and Eni SpA (E) at
the end of 2009 to develop its oil fields.
Shell and
Malaysia
's Petronas Gas Bhd (6033.KU) were awarded the deal in December 2009 to
develop the field located in southern
Iraq
near the Iranian borders. Shell owns 45% of the venture and Petronas
owns 30%, with the
Iraq
state-run company holding 25%.
They have pledged to eventually raise production from Majnoon to 1.8 million
barrels a day.
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