The Shell-operated Majnoon project (Shell interest 45%) in southern Iraq, produces oil from one of the largest fields in the world. At the end of 2014, production at Majnoon averaged 210,000 barrels of oil equivalent (boe) a day – more than its initial production target of 175,000 boe a day. The Iraqi government estimates that Majnoon holds around 38 billion boe.
Iraq is currently facing significant conflict and violence, particularly in the north of the country. The security and safety of our operations, employees and contractors in Iraq remains a primary concern and we have some of the industry’s most experienced security people and leading security technology. We also have mitigation measures in place so that our business continues to run effectively.
Much of the gas produced during oil production in Iraq is currently flared. We want to help reduce this and are working with our partners to capture gas to be used in power generation in Iraq. This also supports the goal of the Iraqi government to increase the use of domestic gas.
At Majnoon, in 2014, the level of associated gas flared has increased in line with production. We have projects planned to reduce this flaring over the next three years. The first commercial production gas project is currently under construction and will capture the majority of the associated gas produced that would otherwise be flared. This gas is expected to provide power for the domestic market, through the North Rumaila power station by the end of 2015.
In the south of Iraq, the Basrah Gas Company (BGC, Shell interest 44%) captures gas from oil fields operated by other companies which would otherwise be flared. In 2014, BGC has gathered, treated and processed more natural gas than in the previous year and used this for domestic power generation. The increase in gas captured in 2014 has avoided another 5 million tonnes of carbon dioxide (CO2) equivalent from flaring. BGC is the largest flare reduction project in Iraq’s history. (See “”).