BAGHDAD, Sept 9 Iraq's giant Majnoon oilfield,
run by Royal Dutch Shell, will start up production next
month at a rate of 175,000 barrels per day (bpd), an oil
ministry spokesman said on Monday.
Majnoon is one of four giant southern fields vital to Iraq's
ambition to at least double output that is now around 3 million
OPEC's second biggest producer expects its output to rise by
400,000 bpd by the end of this year, with Majnoon providing a
big part of that.
Baghdad sent a letter of complaint to Shell last month for
missing start-up dates at this 12 billion barrel oilfield, which
was pumping about 45,000 bpd when the company took over in 2010.
Shell later suspended operations to carry out maintenance work.
The Iraqi government said the delays had resulted in a
production lag, costing the country $4.6 billion.
"Now, we have started testing the oilfield installations in
preparation for opening the wells and pumping to a capacity of
more than 175,000 bpd, which will start next month," spokesman
Asim Jihad told Reuters.
"This is the preliminary production until we reach the
higher production target in future, which is more than one
Iraq signed a series of service contracts with major oil
companies such as Shell, BP, ExxonMobil and Total
at the end of 2009 to develop its oilfields, neglected
for decades due to wars and sanctions.
The revival of the neighbouring Rumaila, Zubair and West
Qurna-1 oilfields has already added 600,000 bpd.
Garraf oilfield in the south, developed by Malaysia's
Petronas and Japan Petroleum Exploration Co. Ltd
started production of 35,000 barrels per day on Saturday.
Petronas also has a minority interest in Majnoon.
The projected increase in production does not include output
from fields in the north, where the Kurdistan Regional
Government (KRG) has signed contracts on its own terms with the
likes of Exxon Mobil and Chevron Corp, angering Baghdad.
Shell has built up a strong position in southern Iraq as
operator of Majnoon, junior partner with Exxon at West Qurna-1
and a partner in a natural gas project.