Shell & Petronas Signed Majnoon Contract

A group led by Shell and Petronas have signed a deal to develop Iraq's giant Majnoon oilfield, pledging to spend tens of billions of dollars on the project over the next two decades.

Shell, along with Malaysia's state-run Petronas, won the rights to Majnoon, a major prize near Iraq's southern oil hub of Basra, in an energy auction earlier in December 2009.

Mounir Bouaziz, a Vice President of Shell Gas and Power, and Abdul-Mahdy al-Ameedi, Deputy Director of the Iraqi Oil Ministry's licensing office, signed the initial agreement in downtown Baghdad 20 December 2009.

It must now be sent to the cabinet for approval. Bouaziz said the investment over the life of the 20-year deal would be "tens of billions" of dollars.

"When the cabinet give agreement to the contract, and the final contract is officially signed, we will start immediately. We know the area, and we have been coming to Basra for more than a year and a half," he told reporters after the signing.

Shell is waiting for final approval of a natural gas deal also located in southern Iraq, which it will take on in partnership with Mitsubishi. - Upstream