Shell Sells Iraq Oil Field, Keeps Basrah Gas
Anglo-Dutch major Shell has agreed to sell its 19.6% stake in the West Qurna 1 oil field, but is keeping its associated gas operation, Basrah Gas Company, it said March 23.
The sale of Shell Iraq for $406mn to Japanese Itochu also includes $144mn of debt, Shell said. With all approvals received, the deal will complete in a few days but be backdated to December 31, 2015, Shell said.
Upstream head Andy Brown, said: “Iraq is an important country for the Shell Group, and exiting West Qurna 1 allows us to focus our resources on other assets in our Iraq portfolio. We are grateful for the support of the Iraqi government during the divestment process.
“Shell remains committed to working with its partners to redevelop Iraq’s energy infrastructure by capturing associated gas, through the Basrah Gas Company joint venture, for domestic and regional consumption. This deal maintains the momentum behind Shell’s $30bn divestment programme and is in line with the drive to simplify our upstream portfolio and reshape the company into a world class investment.”
Shell’s other businesses in the country will not be affected by this divestment.
Basrah Gas Company, which is a joint venture of Iraqi state South Gas Company the majority stakeholder alongside Shell and Mitsubishi, said it produced 676mn ft3/d in 2017 which the company says is enough to generate gas-fired electricity for 11mn homes.
Update March 28: Shell said it completed the sale of its 19.6% stake in the West Qurna 1 oil field for $406mn to Itochu, which has also assumed debt of $144mn as part of the transaction; the field will continue to be operated by ExxonMobil.