Halliburton Wins Shell Contract - Analyst Blog

As per a popular Iraqi website, Halliburton Company (HAL) was awarded a one-year contract by Royal Dutch Shell Plc (RDS.A) and its associates for developing the Majnoon oilfield in southern Iraq. The announcement of the contract was first made in August.

Under the terms of the contract signed on November 22, Halliburton will set up operations for 15 new wells.

In 2009, Shell along with Petroliam Nasional Berhad (“Petronas”), the national oil company of Malaysia, signed a 20-year contract with the Iraqi Ministry of Oil to provide technical support for the development of Majnoon oilfield.

Shell with the majority of interest (45%) acted as the lead operator of the project, while 30% of the stake was with Petronas. The Iraqi state controlled the remaining 25% interest. The consortium targeted to boost the production of the oil field to 1.8 million barrels per day from the current production of 46,000 barrels per day.

As per a spokesperson of Shell, the production level of the Majnoon oilfield reached 70,000 barrels per day on October 12. Majnoon represents one of the richest oil baskets of the world, with an estimated crude reserve of about 12 billion barrels and 9.5 trillion cubic feet of gas.

We maintain a long-term Neutral rating on both Shell and Halliburton. Both currently retain a Zacks #3 Rank (short-term 'Hold' rating).