Apr 04 2011 |
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Shell, Petrofac in deal to upgrade Iraq oilfield
BASRA: Royal Dutch Shell PLC and its partners Malaysia's Petronas and the Iraqi state signed a $200 million deal with U.K.-based oil and gas services company Petrofac Ltd .
(PFC.LN) to design, contract and supply early production units for the development of the super-giant Majnoon oil field in southern Iraq.
Under the deal, Petrofac will provide engineering, procurement and construction management services to build a new early-production system comprising two trains each with a total capacity of 50,000 barrels a day of oil.
Shell is planning to increase output from Majnoon, with estimated reserves of 12.6 billion barrels, to 175,000 barrels a day by the end of next year from current 60,000 barrels a day.
The contract can be extended to include another amount of $70 million to cover maintenance after building the facility, Ole Myklestad, managing director of Shell in Iraq, told Dow Jones Newswires.
The early-production system is expected to be completed and commissioned by the end of 2012, said David Lufkin, Petrofac's head of business development.
"Petrofac is committed to deliver the project to a very high international safety standard and as scheduled," Lufkin said.
He also said Petrofac is planning to establish an office in Basra and a training center as well as other facilities.
Shell and Petronas were awarded the deal in December 2009 to develop Majnoon field, which is located in Basra governorate.
Shell owns 45% of the venture and Petronas 30%, with Iraq's state-run Missan Oil Co. holding 25%.
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