Iraq's Majnoon Oilfield Output Rises to 175,000 Bopd


BAGHDAD, Oct 6 (Reuters) - Production from Iraq's Majnoon oilfield, run by Royal Dutch Shell, has risen to 175,000 barrels per day (bpd), Deputy Prime Minister for Energy Affairs Hussein al-Shahristani said on Sunday.

Majnoon is one of four giant southern fields vital to Iraq's ambition to at least double output that is now around 3 million bpd.

The 12 billion barrel oilfield was pumping about 45,000 bpd when Shell took over in 2010, but the Anglo-Dutch major later suspended operations to carry out maintenance work.

Baghdad sent a letter of complaint to Shell in August for missing start-up dates.

"Production from this field will be 200,000 bpd during the next few days and the production of al-Gharraf field of 100,000 bpd to be added to it, meaning 300,000 bpd will be added to Iraq's crude production and exportation," Shahristani said at a ceremony marking the occasion.

OPEC's second-biggest producer expects its output to rise by 400,000 bpd by the end of this year, with Majnoon - which straddles the border with Iran - providing a big part of that.

Shell has built a strong position in southern Iraq as operator of Majnoon, junior partner with ExxonMobil at West Qurna-1 and a partner in a natural gas project.

Baghdad's oil revival, which got under way in 2010, has slowed this year due to infrastructure and security problems, keeping output far below projected targets and sometimes even below last year's average of 3 million bpd.

Iraq signed a series of service contracts with major oil companies such as Shell, BP, Exxon and Total at the end of 2009 to develop its oilfields, neglected for decades due to wars and sanctions.

The development of the neighbouring Rumaila, Zubair and West Qurna-1 oilfields has already added 600,000 bpd.

Gharraf oilfield in the south, developed by Malaysia's Petronas and Japan Petroleum Exploration Co Ltd, started production of 35,000 bpd earlier this month.

Petronas also has a minority interest in Majnoon. Under the terms of the service contract, Shell vowed to raise production from Majnoon to 1.8 million bpd by 2017 for a fee of $1.39 a barrel. It has been negotiating with Baghdad to reduce the target to around 1 million bpd.


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