Shell considering selling its Iraq oil assets: sources

Mon Nov 28, 2016 12:27pm EST
 
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By Ron Bousso and Dmitry Zhdannikov

LONDON (Reuters) - Royal Dutch Shell (RDSa.L: Quote) is considering selling out of its oil fields in Iraq as part of its global $30 billion asset disposal program, industry sources said on Monday.

Shell is seeking to slim down its vast oil and gas portfolio following the $54 billion acquisition of BG Group in February, which transformed it into the world's top liquefied natural gas trader.

With oil prices having slumped since 2014 the company wants to focus on business areas with the highest returns such as LNG and deepwater oil production in Brazil and the Gulf of Mexico.

A spokesman for Shell in London declined to comment.

The Anglo-Dutch company, which has been present in Iraq for over a century, has found only limited financial benefits in recent years from its involvement in Iraq's oil production, where it is paid in crude oil but has limited say on production strategy, the sources said.

However, Shell continues to see value in developing its gas business in Iraq and is not interested in selling those interests, the sources said.

Iraq accounted for around 4.4 percent of Shell's total oil and gas production in 2015, according to its 2015 annual report.

The move to sell the oil interests highlights the difficulties Iraq faces in its efforts to increase crude output as foreign oil companies such as Shell have found the terms of the production service contracts unappealing.   Continued...

 
A worker walks through the  Majnoon oilfield in Basra, 420 km (261 miles) southeast of Baghdad, October 6, 2013. REUTERS/Essam Al-Sudani