Royal Dutch Shell is considering selling out of its oil fields in Iraq as part of its global $30b asset disposal program, reported Reuters.
Shell is seeking to slim down its vast oil and gas portfolio following the $54b acquisition of BG Group in February, which transformed it into the world’s top liquefied natural gas trader. However, Shell continues to see value in developing its gas business in Iraq and is not interested in selling those interests, according to Today Online.
The Anglo-Dutch is the operator of the giant Majnoon field near Basrah in southern Iraq which started production in 2014. Shell holds a 45% interest in the Majnoon oil field that it operates under a technical service contract that expires in 2030
Shell’s move to sell the oil interests highlights the difficulties Iraq faces in its efforts to increase crude output, as foreign oil companies such have found the terms of the production service contracts unappealing. Iraq’s national output has nevertheless recently risen sharply to around 4.7mb/d as some projects started paying off. Iraq has been pushing the foreign companies including BP, Lukoil, Exxon Mobil, and China National Petroleum Corporation to increase their investments to give it further production gains.