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Sun 17 Jan 2010 07:47 PM

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Shell inks 20 year deal on Iraq’s Majnoon oilfield

Consortium to target production plateau of 1.8m bpd from Iraq's biggest oilfield.

A consortium led by Royal Dutch Shell, Europe’s largest oil company, on Sunday inked a 20-year deal to develop Iraq’s biggest oilfield, Majnoon.

The group, which includes Malaysia’s Petronas, won the rights to the 12.6 billion barrel field in an energy auction in Bagdad last month.

Shell, as lead operator, will hold a 45 percent share of the development project, with partner Petronas holding 30 percent, the Dutch firm said in a statement. The Iraqi state holds 25 percent of participating interests in all contractor consortia.

“Iraq’s oil and gas reserves are among the largest in the world and we look forward to applying our experience and technology to support ongoing efforts to rebuild the country’s energy infrastructure,” said Shell’s CEO, Peter Vosser.

The group will target a production plateau of 1.8 million bpd from the southern Iraq oilfield, up from a current level of approximately 45,000 bpd, the statement said.

The 20-year contract is the first of several deals that Iraq hopes to finalise in the coming weeks, in a bid to raise its crude oil output capacity from roughly 2.5 million bdp, to 12 million bpd in six or seven years.

The Arab state is currently the world’s eleventh-largest oil producing nation.

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