Iraq "Blames Shell" for $4.6bn Lost Income

By John Lee.

Iraq’s oil ministry has reportedly blamed Shell for $4.6 billion in lost revenue due to production delays, according to a letter seen by AFP .

The document, dated July 21, 2013, sharply criticizes the company for shortfalls in oil extraction at Majnoon.

Two separate sources with knowledge of the letter’s contents confirmed its authenticity to AFP, but declined to be identified discussing the matter.

The letter was addressed to Shell’s Iraq Vice President Hans Nijkamp (pictured) and bore the letterhead of the oil ministry’s Petroleum Contracts and Licensing Directorate (PCLD).

According to parts of the letter seen by AFP, it stated that “production from Majnoon Oilfield ... has been stopped for an unacceptably long time” and added that “aggregated losses of production” at Majnoon amounted to 44 million barrels of oil.

“As a result, Iraq has suffered heavy direct losses, which we have determined conservatively at more than (4.6) billion US dollars,” the letter, which was written in English, read.

“Of course, Iraq continues to suffer losses each day as a result of Shell’s failure to perform its contractual obligations.”

It said that “the field has been shut down and the production stopped since 1st July 2012 based upon Shell’s request to perform the rehabilitation of the existing surface facilities.”

“This rehabilitation was to have been completed in four to six months with production resuming no later than 1st January 2013.”

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