Majnoon Oil Field

The Majnoon oil field, located close to the Iranian border in the Basra Governorate of Iraq, sits on one of the world’s biggest untapped oil reserves. The onshore oil field is estimated to contain up to 38 billion barrels of oil resources including an estimated recoverable reserves of more than 12 billion barrels.

Although discovered and undertaken for development in the 1970s, the oil field project suffered long delays due to the Iraq-Iran conflict.

International oil companies, Shell and Petronas, were offered to redevelop the field to raise its production up from 45,000 barrels of oil per day (bopd) to a plateau production level of 1.8 million barrels a day (Mbopd), under a contract awarded in 2010.

After restarting production in 2013 and operating barely for four years, Shell and Petronas, however, decided to exit the Majnoon concession, in anticipation of a steep decline in profitability following a decline in oil prices.

The control and operatorship to the field was transferred to state-run Basra Oil Company (BOC) in June 2018, which is carrying out an expansion to increase the field’s production from 240,000bopd to 450,000bopd by the end of 2022.

The development of the massive field is expected to continue further towards reaching its potential production levels, as Iraq is forecast to raise its oil output by 30% to 6Mbopd by 2030, to become one of the biggest providers of new oil supplies in the world over the next decade.

Majnoon field discovery and reservoir details

The Majnoon field was discovered by the Brazilian state company Braspetro (formerly a part of Petrobras) in 1975, under a risk exploration, production, and service contract signed with the Iraq National Oil Company in August 1972.

The onshore field spans 52km-long and 15km-wide and comprises 13 oil and gas reservoirs of the Cretaceous age.

Majnoon field development background

The Majnoon oil field remained largely undeveloped due to the Iran-Iraq war that continued from 1980 to 1988.

Although brought on-stream by the state-owned Iraq South Oil Company (now Basra Oil Company) in 2002, the field development again suffered setback due to the Iraq War starting from 2003.

Shell Iraq Petroleum Development (SIPD), a subsidiary of Shell, along with the Malaysian state firm Petronas, was awarded a 20-year technical assistance contract by the Iraqi Government to redevelop the field and raise its output, in January 2010.

Shell and Petronas agreed to develop the field for a remuneration fee of $1.39 for each extra barrel of oil produced above the prevailing output level of 45,000bopd.

SIPD, the lead operator, held 45% interest in the project, while Petronas and Iraq’s state-owned Maysan Oil Company held 30% and 25%, respectively.

Redevelopment of the Majnoon oil field under Shell’s operatorship

Redevelopment of the field began with clearing the vast field area of explosive remnants that were accumulated over years of military battle, with the help of bulldozers and loaders.

New production wells were drilled and a central processing facility (CPF) was constructed, apart from revamping the existing installations for the field.

First oil from the redeveloped field was achieved in September 2013 with an initial production capacity of 175,000bopd, which was increased to 194,000bopd in 2014.

The output was further increased to 210,000bopd, before Shell and Petronas left the field in 2018.

Infrastructure facilities

The Majnoon oil field is currently developed with 38 wells, a CPF, and two degassing stations namely DS1 and DS2.

Power supply for the field operations is provided by a 23MW mobile power plant comprising six 5.7MW Taurus 60 mobile power units from Solar turbines, a subsidiary of Caterpillar.

Majnoon field expansion details

The current expansion plan involves drilling of more than 100 new wells, expansion of the CPF with two additional oil processing trains of more than 100,000bopd capacity each, a sour gas treatment plant, and a central power plant, along with new flowlines and other associated infrastructure.

Contractors involved

Anton Oilfield Services and Petrofac were awarded a two-year integrated field management support (IFMS) contract to operate the Majnoon oil field on behalf of Basra Oil Company, in April 2018. The contract is also renewable after two years.

Hilong Oil Service & Engineering, a company based in China, was contracted to prepare and complete 80 oil wells at Majnoon, in September 2019, while Iraqi Drilling Company was contracted to drill 43 new wells in January 2019.

Petrofac was awarded an engineering, procurement, and construction (EPC) contract worth £291m ($370m) for the expansion of the Majnoon CPF in August 2018. The company had also provided EPC management services for the existing CPF under a contract awarded in 2011.

KBR was contracted to provide front-end engineering and design (FEED) as well as project management and EPC services for the field expansion, in May 2018.

Other contractors engaged in the previous phase of the field development were Halliburton and Nabors Drilling, Wood Group, Consolidated Contractors Company (CCC), ENKA, and ALE, a heavy-lift specialist.