Iraq's Majnoon seen at 175,000 bpd by August

Iraq's Majnoon oilfield, operated with Royal Dutch Shell, is expected to reach 175,000 barrels per day (bpd) production by August this year from current output of 54,000 bpd, a senior official at state-run South Oil Company said on Tuesday.

Mehdi Badi, head of the joint management committee for the field, told Reuters investment so far in the field was probably less than $500 million, but could reach beyond $25 billion by the time the long-term Majnoon project is completed.

Majnoon is one of the major deals signed with international oil companies as Iraq seeks to ramp up production capacity after years of war and sanctions battered its petroleum industry.

Shell and minority partner Petronas need to reach 175,000 bpd at the field to attain the first commercial production level and trigger cost recovery and payment of service fees under the Majnoon agreement.

Three rigs are working at Majnoon, which hit as high as 90,000 bpd output in December 2010. Work on a de-gassing station has temporarily reduced production, Badi said.

He said attaining 175,00 would depend on pipeline network infrastructure, the number of wells drilled and completed and also on whether contractors were able to secure visas for Iraq. Bureacratic snags have recently delayed visa paperwork for some foreign workers coming into Iraq.

Majnoon is one of the major fields alongside Rumaila, West Qurna Phase One and Zubair that the Opec-member country is developing with foreign companies in the south.