Oil major Royal Dutch Shell (RDSa.L) has agreed to exit the Majnoon oilfield and hand over its operation to the state-run Basra Oil Co. by the end of June 2018, two oil officials close to the deal said on Wednesday.
A letter signed by Iraqi oil minister Jabar Luaibi, dated Aug. 23 and seen by Reuters, gave approval for the Anglo-Dutch company to quit Majnoon, a major oilfield near Basra which started production in 2014.
Two Iraqi oil officials said the deal was reached during a meeting between Shell and officials from state-run Basra Oil on Monday at the Majnoon oilfield.
"We agreed that eight months is quite enough time for Shell to finish preparations to exit Majnoon. Basra Oil Company will take over operations," said one official close to the meeting.
Majnoon currently produces around 235,000 barrels of oil per day, oil officials said.
Under the exit agreement, Iraqi workers hired and trained by Shell will stay working in Majnoon, even though development operations will be handled by Iraq or another foreign contractor, said another Iraqi oil official.
A Shell spokesman was not immediately available for comment.
Shell said it would focus its efforts on the development and growth of the Basra Gas Company in Iraq after handing over operations of Majnoon to the Iraqi government.
Basra Gas Company is a joint venture between Shell, South Gas Company and Mitsubishi and the Petrochemical Project NEBRAS.