Shell exiting Majnoon Oil Field, Iraq

It was on the news today that Shell operator with 45% interest over Majnoon field is exiting from the Technical Sharing Contract (TSC). As mentioned on the news, this is part of its USD30BN asset disposal programme.  Apart from Shell, the parties in Majnoon is PSC are PETRONAS 30% and Missan Oil 25%.

Shell is expected to exit at least five upstream provinces. Apart from selling of its assets, Shell is also acquiring British Gas (BG) company. 

Majnoon oil field is located onshore, southern province of Basra, Iraq with an area size of 572 sqkm. First oil was discovered in 1977 by Petrobras. The Oil Initially In place at Majnoon is estimated at around 38 billion barrels, multiple reservoirs predominantly carbonate from Middle to Lower Cretaceous. The crude ranges from 17-37 deg API .

The key issues in Iraq was the federal government has been unable to reimburse cost recovery and remuneration fees to contractors in full after collapse of oil price in 2014. Accessing the field is challenging due to a large number of unexploded land mines. The surrounding area in the south is a wetland, an ecological sensitive area which Iraq has nominated for protection under United Nations World Heritage Convention. A number of Iraq TSCs have undergone renegotiation especially to lower production targets.