A consortium made up of Royal Dutch Shell PLC (RDSA) and Malaysia's Petronas finalized in Baghdad Sunday an agreement to develop southern Iraq's supergiant Majnoon oil field, having won the contract in the country's historic second oil-field auction held in December.
Shell has the biggest stake in the venture with 60% while Petronas holds the remaining 40%. The consortium proposed to receive a fee of just $1.39 a barrel and pledged to increase production to 1.8 million barrels a day from the field which holds some 12.8 billion barrels of proven oil reserves.
A consortium of France's Total SA (TOT) and China National Petroleum Corp. also submitted a bid for the Majnoon, which means crazy in Arabic, but lost out because they offered a fee of $1.75 a barrel and suggested a production plateau of 1.405 million barrels a day.
Shell also partnered with ExxonMobil to win a deal to develop the prized West Qurna Phase 1 oil field in southern Iraq following the country's first bidding round held in June. ExxonMobil which holds the bulk of stakes in the field will meet with Iraqi oil ministry officials on Monday to discuss changes made to the original text of the contract which it initialed with Iraq last year. If things go all to plan, the ExxonMobil group will finalize the deal soon, officials said.
Shell is also waiting for final Iraqi government approval of a natural gas deal to extract gas from southern Iraqi fields. In this deal Shell s partnered with Japan's Mitsubishi.