Shell Discusses Energy Investments with OPEC
Royal Dutch Shell is engaged in two separate talks with OPEC countries, Iraq and Saudi Arabia on issues about oil production targets and LNG exploration, respectively.
According to Mounir Bouaziz, Shell’s regional VP, the Majnoon oil field is one of the biggest blocks found in Iraq. By June, his group expects to extract crude from it and projects output to grow to about 175,000 bpd towards December. Meanwhile, Shell and Saudi Arabian officials continue to discuss plans of jointly exploring and developing liquefied natural gas in Kidan Field, Saudi Arabia.
Although he refused to discuss details of both plans, he stressed that Shell is confident about its oil investments in Iraq. He also said that Shell and Saudi mutually agree on pursuing and developing Saudi’s Kidan Field project.
Saudi Arabia continues to be the top oil exporter among OPEC-member countries, followed by Iraq, and then by Iran, which slid from second to third ranking last year.
Bouaziz admitted that Iraq had bureaucratic issues which partly pushed back projects at Majnoon. He cited delays with Iraqi customs and embassy offices, which slowed down machinery importation and visa issuance. Nevertheless, he pointed out that Shell is seeing positive changes with the way these processes are now being handled.
The majority stake in the Majnoon project is held by Shell. Petronas of Malaysia and Iraq hold the remaining stake at 30 percent and 25 percent, respectively. The oil field is known to hold crude oil in the amount of about 12 billion barrels, and gas reserves are estimated at 9.5 trillion cubic feet.
Previously, Iraq agreed to slash oil output targets for Lukoil which is in charge of crude production at the West Qurna 2 oil block. Reports also say that cuts in oil production may also be approved for the West Qurna 1 block, which is currently run by Exxon.
Shell says that talks about setting output targets at the Majnoon field are still tentative. But whatever is the outcome, Shell and other partner oil companies are banking on Iraq’s commitment to create an atmosphere that is open and responsive enough to lure more foreign oil companies to invest in oil and gas exploration and development in the country.