Iraq pipeline delays threaten shell's Majnoon output

Iraq pipeline delays threaten shell’s Majnoon output

Delays in Iraq's pipeline construction threaten to stall production at Royal Dutch Shell's Majnoon oilfield for at least three months, forcing the field to miss a 2012 target of 175,000 barrels per day, oil ministry documents showed.

August 27, 2012 1:02 by Reuters

Delays in Iraq’s pipeline construction threaten to stall production at Royal Dutch Shell’s Majnoon oilfield for at least three months, forcing the field to miss a 2012 target of 175,000 barrels per day, oil ministry documents showed.

Wary of losses, Shell has asked Iraq for a waiver to start recovering costs if Majnoon does not meet its first commercial production target by year-end – a contract requirement before costs can be retrieved, according to documents seen by Reuters.

Shell’s troubles illustrate infrastructure hurdles facing oil operators in the OPEC nation. Some oil majors have begun signing deals with Iraq’s autonomous Kurdistan region, which they say offers more attractive conditions than the country’s federal government in southern oilfields.

(Reporting by Ahmed Rasheed; Editing by Patrick Markey and Helen Massy-Beresford)