Local Content for the Economic Development of Iraq
- Hans Nijkamp (Shell) | Alexander Nieuwenhuizen (Shell)
- Document ID
- World Petroleum Congress
- 21st World Petroleum Congress, 15-19 June, Moscow, Russia
- Publication Date
- Document Type
- Conference Paper
- 2014. World Petroleum Council
- 0 in the last 30 days
- 124 since 2007
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Shell has a long history in Iraq which began via a partnership with the Iraq Petroleum Company (IPC) during the 1920s. Since re-entering the country in September 2008 we have made extensive progress in several areas by first signing a Heads of Agreement to start midstream activities.
This involves gathering, treating and processing natural and associated gas that is currently being flared from three oil fields in southern Iraq – Rumaila, West Qurna1 and Zubair, for future domestic use.
The initiative was formally ratified by the Council of Ministers and as a result of the agreement between the South Gas Company, Shell and Mitsubishi, the country will benefit from the world’s largest gas flaring reduction project – the Basrah Gas Company (BGC).
The South Gas Company is the 51% majority shareholder in BGC, with Shell holding 44% and Mitsubishi Corporation the remaining 5%. Operations officially commenced on 1 May, 2013.
In January 2010, the Ministry of Oil and Shell signed a contract to develop the Majnoon oil field. Shell was awarded a 45% shareholding as lead operator and Petronas 30% with the remaining 25% going to the Iraqi State Partner (Missan Oil Company).
Shell and our partners successfully recommenced production from Majnoon in September 2013.
In May 2012 Shell signed a memorandum of understanding on a petrochemicals project called Nebras with Iraq’s Ministry of Industry & Minerals and work continues towards a Heads of Agreement.
Like many other IOCs, we have been able to make tangible progress by building on a solid foundation of local content strategy benefitting the local communities in and around the areas we operate.
Encouraging local content in areas such as Basrah, where we are the lead operator in Majnoon, is key to future development as the communities historically suffer from high unemployment rates combined with a young population lacking in key skills.
Our involvement develops supply chains to encourage the procurement of products and services provided by local companies. Local content also stimulates productivity creating a mutually beneficial and sustainable business environment for us to work in.
As Iraq continues to take significant strides forward in its rebuilding process, local content is the key to unlocking the potential of the country’s future generations as it encourages knowledge transfer and the sharing of best practices to deliver opportunities.
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