Royal Dutch Shell is seeking to sell Iraq's Majnoon oilfield and the oil ministry has started preparations to finalise its exit, according to an oil ministry letter and oil officials.
Shell has made a decision to sell its interest in Iraq's Majnoon oil field after the oil major and Iraq failed to agree on future production plans and investments budgets, Reuters reported on Wednesday, citing a letter of Iraq's oil ministry to Shell that it had seen.
Three local oil officials and a senior engineer working at Majnoon with Shell confirmed to Reuters that the letter was authentic.
Shell confirmed that the West Qurna 1 field is now undergoing a sales process, Reuters reported.
"Shell remains firmly committed to Iraq".
Production from Majnoon is now at around 235,000 barrels per day, according to Iraq's oil officials.
"In May 2017, the ministry of oil in Iraq applied the performance penalty and remuneration factor on the Shell operated venture, the Majnoon oil field, which had a significant impact on its commerciality", a Shell spokesman said.
"We failed to reach an agreement with Shell over its Majnoon operations, including production plans and investments budgets".
Shell holds a 45% interest in Majnoon that it operates under a technical service contract that expires in 2030, according to its 2015 annual report.
Basra Gas Company is a joint venture between Shell, South Gas Company and Mitsubishi and the Petrochemical Project NEBRAS.