Dubai – Majnoon oilfield under the Royal Dutch Shell in Iraq that has been hampered by the delay in pipeline constructions may miss the target it has set for itself to reach 175,000 bpd in 2012.
Executive vice president of the Middle East and North Africa at Shell Upstream International has said on Tuesday, that the progress is slower than they hoped for.
He has also added that the project is developing now.
When he was asked if the target of 175,000 by 2012 will be meet or not, he said that there is a possibility.
Being tensed about the losses Shell has asked the Iraqi government to start recovering the cost for Majnoon oilfield, which has been shut on 26th June for maintenance, if it cannot reach the first commercial production target, but he papers show that there is the need for a contract to make this happen.
Along with the oil fields like West Qurna, Rumalia and Zubair, which are being developed with the help of the foreign companies in south Iraq, Majnoon with its 12.6 billion reserve of crude oil is one of the major oil fields. All these developments will help the country to recover from the situation of war and sanction.
According to Shell, the oil production at Majnoon in February was 54,000 bpd, but the first quarter of the year saw an average of 18,600 bpd only, which is way less than the planned target for the end of the year.
Carne has told that the amount of production varied, but the highest amount of production was at 54,000 or 60,000 bpd. The amount was that much, because neither the facilities nor the pipelines were capable of handling more. That is why the company is making the investment.
When Shell took over in 2010, the oil production of the field was 45,000 bpd. Since then Shell has spend more than $1 billion and is planning to invest another $1 billion in the same area.
Carne has added that the new facilities will have the capacity of 100,000 bpd and the refurbished brownfield facilities will also have the capacity of 100,000 bpd. When both the facilities will be reinstated, it will be easier for Shell to reach the 175,000 bpd target.
The 28 inch pipeline which is existing, cannot deal with this increase in the crude oil production.
In the May of last year, Iraq along with Shell and Malaysia based firm Petronas had given the $106 million contract to the Dubai based firm Dodsal Group to build the 79 km long pipeline from Majnoon to the Crude storage depot near Zubair in Southern Iraq.
Eventually, the oil ministry cancelled this deal on the condition that the cost was too much and handed the same project to an oil ministry affiliate. According to the oil officials, the pipeline cannot be finished before March 2013.
Majnoon is just a part of the portfolio of Shell in Iraq. The largest oil company of Europe has a significant amount of foothold in the market of Iraq, with the $17 billion gas joint and the minority shares in the West Qurna oilfield which is lead by Exxon Mobil.
Source [Reuters]