Reports indicate that Royal Dutch Shell plc (ADR)(NYSE:RDS.A) has committed to exiting Iraq’s Majnoon oilfield before July next year. Upon its exit operations of the oilfield will be handed over to Basra Oil Co, an oil firm owned by the Iraqi government. The Majnoon oilfield which is located close to Basra began production three years ago.
Approval for Shell to quit Majnoon came from Jabar Luaibi, the Iraqi oil minister, in a letter that was signed by him dated August 23, 2017. According to Iraqi oil officials, Shell officials as well as representatives of Basra Oil met on Monday and it was then that an agreement was reached.
“We agreed that eight months is quite enough time for Shell to finish preparations to exit Majnoon. Basra Oil Company will take over operations,” Iraqi oil officials said.
Iraqi workers whose hiring and training was done by Royal Dutch Shell continue to work at the oilfield despite the fact that another entity will take over the development operations. At the moment the number of barrels of oil that are produced at the Majnoon oilfield exceed 235,000 on a daily basis.
After the exit Shell will concentrate its Iraqi operations on developing and growing Basra Gas Company, a firm jointly owned by Shell, Petrochemical Project NEBRAS, Mitsubishi and South Gas Company.
The exit of Royal Dutch Shell from the Majnoon oilfield coincides with the oil major’s decision to close down its Enchilada platform after two people were injured following an operational incident in the Gulf of Mexico. According to the Coast Guard production was halted because of a fire which had since then been put out.
Besides the two injured crew members, other workers numbering 46 were evacuated to another platform. And other than the Enchilada platform the Auger and Salsa platforms were also shut as well as nearby fields. Also shut down was a gas export pipeline. Shell later announced that the course of the fire had been identified at Enchilada.
In Thursday’s pre-market trading hours shares of Royal Dutch Shell Plc rose by 0.79% and were trading in the range between $24.24 and $64.83.