Iraq, Shell-Petronas ink initial deal on Majnoon oil field

14:06, December 21, 2009      

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Iraq signed a preliminary deal with an oil consortium led by European energy giant Royal Dutch Shell PLC and Malaysia's state-run Petronas on Sunday to develop one of its most prized oil fields.

The contract on the Majnoon oil field located in the south was signed in a ceremony at Iraq's Oil Ministry, but the deal is still have to be approved by the Iraqi cabinet.

The two companies won the right to develop the oil field with estimated reserves of 12.5 billion barrels during the latest auction on Dec. 11-12, which awarded seven contracts to international oil firms.

The Shell-Petronas consortium proposed to raise the crude oil output from the current level of about 45,900 barrels per day (bpd)to 1.8 million bpd with a remuneration fee of 1.39 dollars for each barrel produced.

The supergiant oil field is located near Iraq's southern oil hub of Basra, some 550 km south of Baghdad.

Iraq is aiming to increase its crude oil output capacity, currently at roughly 2.5 million bdp, to 12 million bpd in six or seven years.

Source: Xinhua
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