Shell to offload stake in Iraq’s West Qurna 1 oil field for $406m

Shell EP Middle East Holdings has signed an agreement to sell Shell Iraq’s (SIBV) entire stake in the West Qurna 1 oil field for $406m to a subsidiary of Japanese firm Itochu.

The divestment comprises a 19.6% interest in the field and will be made through the sale of the entire share capital of SIBV.

Under the deal, the buyer is also required to assume a $144m debt.

The transaction is said to have received the necessary regulatory approval and is scheduled to be closed in the next few days.

Shell Upstream Director Andy Brown said: “Iraq is an important country for the Shell Group, and exiting West Qurna 1 allows us to focus our resources on other assets in our Iraq portfolio.

“Shell remains committed to working with its partners to redevelop Iraq’s energy infrastructure by capturing associated gas through the Basrah Gas Company (BGC) joint venture (JV) for domestic and regional consumption.

“This deal maintains the momentum behind Shell’s $30bn divestment programme and is in line with the drive to simplify our upstream portfolio and reshape the company into a world-class investment.”

Shell joined the Qurna 1 venture in 2009, in partnership with other stakeholders. Following the completion of this latest transaction, the Qurna 1 venture will continue to be operated by ExxonMobil.

Despite the sale, Shell intends to continue its operations in the country. Its partners in the field include ExxonMobil, PetroChina, Pertamina and Oil Exploration Company.