Shell wins historic Iraq oil contract

Click to follow
The Independent Online

Royal Dutch Shell today landed one of only two deals in the latest auction of Iraqi oil assets.

The Anglo-Dutch oil giant, in partnership with Malaysia's state-run Petronas Carigali, secured rights to the Manjoon field in the Basra region.



The joint venture beat a consortium of France's Total and China National Petroleum Corp (CNPC), to develop what is one of the largest oil fields in the world.



The Shell-Petronas consortium will receive 1.39 US dollars a barrel produced from the field. The companies said they would raise production from the current 45,900 barrels per day to 1.8 million barrels per day over a 10-year period.



The auctions are being staged 30 years after Saddam Hussein nationalised the oil sector and kicked out foreign firms.



The inaugural auction in June flopped as Iraq secured just one deal with BP out of eight oil and gas fields put out to tender.



A total of 15 fields were up for grabs today and tomorrow, representing about one third of the country's reserves. However, five of those in troubled parts of the country have been withdrawn and another attracted a single bid.



At the start of today's auction Iraqi Prime Minister Nouri al-Maliki, looked to allay concerns about bombings and other incidents that have plagued the oil-rich nation since the 2003 US-led invasion.



It was clear, though, that the significance of a wave of attacks across Baghdad earlier this week, which killed at least 127 people, was not lost on executives from the 44 companies participating in the auction.



"We were expecting that some companies would consider the security situation in Diyala and Ninevah provinces," said Oil Minister Hussain al-Shahristani.



The Manjoon oil field is the biggest of the fields on offer. A second consortium led by CNPC won the rights to the Halfaya field, also in the south of the country.



In the June auction, a BP-led consortium secured rights to one of Iraq's biggest oil fields.



The oil major teamed up with CNPC for the bid to land the contract for the Rumaila oil field, which holds 17.8 billion barrels in crude reserves.

Comments