Shell “Considering Selling” Iraq Oil Assets

By John Lee.

Shell is reported to be considering selling its oil fields in Iraq, as part of a global $30-billion asset disposal program.

The move follows the company’s $54-billion acquisition of gas company BG Group earlier this year.

Industry sources told Reuters that Shell has found only limited financial benefits in recent years from its involvement in Iraq’s oil production, where it is paid in crude oil but has limited say on production strategy, but that it continues to see value in developing its gas business in Iraq and is not interested in selling those assets.

Iraq accounted for around 4.4 percent of Shell’s total oil and gas production in 2015, according to its 2015 annual report.

Shell holds a 45 percent stake in the giant Majnoon oil field, that it operates under a technical service contract that expires in 2030. Production at Majnoon has stalled at 200,000 bpd, and although it has plans to double output, the company is just focusing on sustaining production this year.

It also has a 15 percent interest in the West Qurna 1 field (Reuters reports that it has 20 percent interest), which is operated by ExxonMobil.

The Basrah Gas Company (BGC) is a joint venture between the state-owned South Gas Company (SGC) (51%), Shell (44%) and Mitsubishi (5%).

(Source: Reuters)

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