Shell to hand over Iraq's Majnoon oilfield by June 2018

Royal Dutch Shell has agreed to leave the Majnoon oilfield and transfer its operations to the state-run Basra Oil Company (BOC) 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 August 23, gave approval for the Anglo-Dutch company to hand over 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 BOC 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, industry officials said.

Another Iraqi oil official said that under the exit agreement, Iraqi workers hired and trained by Shell will continue working at Majnoon, even though development operations will be handled by Iraq or another foreign contractor.

A Shell spokesman was not immediately available for comment.

Shell said it would also focus its efforts on the development and growth of the Basrah Gas Company (BGC) in Iraq after handing over operations of Majnoon oilfield.

BGC is a joint venture of Shell, South Gas Company, Mitsubishi and the Petrochemical Project NEBRAS.