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Interview: Shell sells stake in Iraq oilfield to Japan's Itochu - oil official

Reuters  |  BASRA, Iraq 

By Aref Mohammed

BASRA, (Reuters) - has approved the sale by Royal Dutch of the company's 20 percent stake in Iraq's 1 oilfield to Japan's Itochu Corp, a senior Iraqi official said on Wednesday.

The deal comes as the company agreed to exit the Majnoon venture, one of the largest fields in OPEC member Iraq, and hand over its operation to the state-run Co. (BOC) by the end of June 2018.

"sold its stake in 1 to Itochu and the ministry approved it. We met with Itochu and discussed the required financial investments and operations at the field," Jabbar, the of state-run BOC, told in an interview.

The 1 oilfield, operated by Mobile, currently produces around 405,000 barrels per day.

and Itochu were not immediately available for comment.

also said BOC had reached an agreement with KBR Inc, a U.S. engineering and construction firm, to help manage projects to develop production capacity at the Majnoon field.

is still in talks with another foreign engineering firm to operate the facilities at Majnoon and a deal is expected before June, said Abdul Jabbar, without naming the company.

"We are targeting to cut the cost of the projects' development by 30 percent this year," said Abdul Jabbar, adding the development cost for Majnoon set by in 2017 was $1 billion.

has said it is still committed to producing gas in Iraq, focusing on developing and expanding the Gas Company, which processes gas from the Rumaila, 1 and Zubair fields. It has a 44 percent stake in the joint venture.

is now is giving advice to the Majnoon managing teams on the tendering process and how to maintain normal operations at the field, said

He said the associated gas extracted from Majnoon stood at around 130 million cubic feet per day (mcf/d) and only 70 mcf/d was processed and utilised, with the rest flared.

(Additional reporting and writing by Ahmed Rasheed; Editing by Mark Potter)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, January 10 2018. 19:51 IST