Shell Wins Right to Develop Iraq Oil Field

December 11, 2009

(ChattahBox)— The bidding process began today in Baghdad, for development rights to the 2.6 billion barrels of oil reserves in Iraq’s Majnoon field. Royal Dutch Shell won the bid in the second round along with its partner in the venture, Petroliam Nasional Bhd. As the war-torn country becomes more stabilized, the Iraqi government is beginning the process of reopening its lucrative oil fields. Iraq holds the world’s third-largest oil reserves.

Oil Minister Hussain al- Shahristani said more than 35 companies are participating in the bidding process on Friday and Saturday. Shell’s winning bid projected 1.8 million barrels of output a day at a cost of $1.39 a barrel. Shell is also partnering with Exxon to capture natural gas from the country’s southern fields and is also involved in the development of Iraq’s West Qurna oil field.

The first oil development contract was awarded in June to BP and China National Petroleum, to develop the southern Rumaila field, which is the country’s largest.

Prime Minister Nuri al- Maliki seeks to move quickly in awarding contracts, with the goal of boosting oil production from about 2.4 million barrel a day to 7 million barrels within the next six years.

Iraq hopes to earn about $150 billion to $200 billion a year in revenue from crude oil production.

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