MOSCOW (MRC) -- Royal Dutch Shell is considering selling out of its oil fields in Iraq as part of its global USD30 billion asset disposal program, industry sources said on Monday, reported Reuters.
Shell is seeking to slim down its vast oil and gas portfolio following the USD54 billion acquisition of BG Group in February, which transformed it into the world's top liquefied natural gas trader.
Thus, as MRC wrote before, in March 2016, Royal Dutch Shell Plc lined up assets for a USD30 billion divestment program that may extend from the U.S. and Trinidad to India following its record takeover of BG Group Plc.
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.
The Anglo-Dutch is the operator of the giant Majnoon field near Basrah in southern Iraq which started production in 2014.
Royal Dutch Shell, commonly known as Shell, is an Anglo–Dutch multinational oil and gas company headquartered in the Netherlands and incorporated in the United Kingdom.Created by the merger of Royal Dutch Petroleum and UK-based Shell Transport & Trading, it is the fourth largest company in the world as of 2014, in terms of revenue, and one of the six oil and gas "supermajors".