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Iraq completes Shell-led deal for huge oil field

Associated Press

BAGHDAD (AP) – Iraq has finalized a deal with a consortium led by Royal Dutch Shell to develop one of Iraq’s mammoth oil fields in the south.

Shell and partner Malaysia’s state-run Petronas won the right to develop the 12.5 billion barrel field last month during Iraq’s second postwar bidding round.

The companies will be paid $1.39 per barrel produced. They plan to raise production at the Majnoon field from the current 45,900 barrels per day to 1.8 million barrels per day over 10 years.

The 20-year deal was inked Sunday during a ceremony at Iraq’s Oil Ministry in Baghdad.

The deal is one of seven agreements awarded in a December round that offered 15 oil fields up for bid. The other deals are expected to be finalized this month.

Copyright 2009 The Associated Press. All rights reserved.

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