Shell to Re-Start Majnoon Output in Q1

By John Lee.

Shell expects to resume production at its Majnoon oilfield in Iraq in the first quarter of 2013, Arne de Kock, commercial general manager for Iraq, has told Reuters.

The company then expects to lift output to 175,000 bpd by March or April, this being the level of production required for it to start recovering costs under its contract with Baghdad.

According to documents seen by Reuters, Shell has asked Iraq for a waiver to start recovering costs if Majnoon, which shut for maintenance on June 26, does not meet its first commercial production target by year-end.

"The vast majority of Majnoon is greenfield," de Kock said, meaning a new field development requiring new facilities. "Getting all of that heavy equipment into place is far more cumbersome and is causing some delays."

Shell is waiting for construction of a new 79-km (50-mile) pipeline by the Iraqi government to move the crude oil it produces at Majnoon to storage sites.

"The pipeline is not progressing as fast as we would like," said de Kock.

(Sources: Reuters, Sharecast)

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