Royal Dutch Shell has agreed to exit the Majnoon oil field and hand over its operations to the state-run Basra Oil Company by the end of June, two officials familiar with the Iraqi oil sector said on Wednesday.
A letter signed by Iraqi Oil Minister Jabbar al-Luaibi dated August 23 granted the British-Dutch company permission to leave the oil field near Basra, which began production in 2014.
The agreement was signed at a meeting between Shell and officials of the Basra Oil Company on Monday in the Majnoon oil field, the officials said.
An official familiar with the meeting said: “We agreed that an eight-month period would be sufficient for Shell to complete its preparation to get out of a madman.” Basra Oil Company will take over operations in the field.
Oil officials said the Majnoon field currently produces about 235,000 barrels of oil a day.
Another Iraqi oil official said that under the exit agreement, Iraqi workers appointed and trained by Shell will continue to work in Majnoon, although the development will be handed over to Iraq or another foreign contractor.
A spokesman for Shell could not be reached for comment.
Shell said it would focus on the development and growth efforts of the Basra Gas Company in Iraq after handing over the Majnoon field to the Iraqi government.
Basrah Gas Company is a joint venture between Shell, South Gas Company, Mitsubishi and Nebras Petrochemicals.