Royal Dutch Shell is looking to conclude its operations at Iraq’s Majnoon oilfield, Reuters reports.
The company will transfer its responsibilities at the oil field to the Iraqi oil ministry, according to Reuters
In May, Iraq penalized Shell for underperformance at the site, a Shell spokesman said. The spokesman added that the penalty had “had a significant impact” on the commercial viability of Shell’s operations at Majnoon, Reuters reports. As such, it decided to transfer operations at the oilfield back to the Iraqi government.
Shell will continue to operate its other ventures in Iraq.
“Shell remains firmly committed to Iraq. By handing over[its] Majnoon operation to the ministry of [o]il, Shell will be in a stronger position to maximize value to the government of Iraq and its people as well as our shareholders, the company spokesman said, according to Reuters.
Shell has a 45% stake in the Majnoon oilfield until 2030. The remaining 55% is split between Petronas (30%) and the Iraqi government (25%), Reuters reports. Current production from the site is approximately 235,000 barrels per day (b/d).
In May, Reuters reported that Shell had signed a $210 million contract with Halliburton to drill 30 new wells at the site. The new wells were projected to increase production from 220,000 b/d to 400,000 b/d.