Petronas looks to exit from Iraq’s Ma­jnoon field

The Star Malaysia - StarBiz - - News -

KUALA LUMPUR: Petro­liam Na­sional Bhd (Petronas) plans to sell its stake in Iraq’s giant Ma­jnoon oil field, sources said.

Petronas has de­cided to with­draw from its 30% par­tic­i­pat­ing in­ter­est in the project be­cause it con­sid­ers the re­turns to be too low, ac­cord­ing to a source.

The en­ergy firm may soon hire ad­vis­ers to help find an in­ter­ested party to take up the hold­ing, the per­son said, ask­ing not to be iden­ti­fied be­cause the in­for­ma­tion is pri­vate.

It com­mu­ni­cated the de­ci­sion to Iraq’s oil min­istry in the past few weeks, an­other source said.

Petronas fol­lows Royal Dutch Shell Plc in seek­ing to with­draw from Ma­jnoon, which is one of the coun­try’s largest oil fields with about 200,000 bar­rels a day of pro­duc­tion.

Shell had a 45% in­ter­est in the Ma­jnoon ser­vice con­tract, in which it was paid a fee for each bar­rel of oil pro­duced above a cer­tain level un­til 2030.

Petronas chief ex­ec­u­tive of­fi­cer Tan Sri Wan Zulk­i­flee Wan Arif­fin, who took the helm in 2015, said last year he is seek­ing to de­fer projects and cut ex­penses by as much as RM50­bil over the com­ing four years.

Petronas en­tered Iraq in 2009 when it won the rights to de­velop crude de­posits at the Gar­raf oil field with Ja­pan Pe­tro­leum Ex­plo­ration Co.

Petronas is also par­tic­i­pat­ing in the Badra oil field through a con­sor­tium led by Gazprom PJSC and has a stake in the Hal­faya field be­ing de­vel­oped by com­pa­nies in­clud­ing PetroChina Co. De­lib­er­a­tions on with­draw­ing from Ma­jnoon are at an early stage, and there is no cer- tainty they would lead to a trans­ac­tion, the peo­ple said.

Spokes­men at Petronas and the Iraq oil min­istry’s me­dia of­fice said they didn’t have any im­me­di­ate com­ment.

Shell said last month it de­cided to sur­ren­der its stake in Ma­jnoon af­ter a per­for­mance penalty and re­mu­ner­a­tion fac­tor, ap­plied to the field by the gov­ern­ment since May, had a “sig­nif­i­cant im­pact” on com­mer­cial vi­a­bil­ity.

The field, lo­cated near the south­ern Iraqi city of Basra, pumped its first oil in Septem­ber 2013.

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