March 23, 2018 / 8:23 AM / a year ago

Shell to sell West Qurna 1 oilfield stake to Japan's Itochu for $406 million

A Shell logo is seen at a gas station in Buenos Aires, Argentina, March 12, 2018. REUTERS/Marcos Brindicci

(Reuters) - Oil major Royal Dutch Shell (RDSa.L) on Friday agreed to sell its entire stake in Iraq’s West Qurna 1 oilfield to Japan’s Itochu Corp (8001.T) for $406 million (287.56 million pounds).

The deal comes shortly after the Anglo-Dutch company agreed to exit the Majnoon oilfield, one of the largest fields in OPEC member Iraq, and hand over its operation to state-run Basra Oil Co (BOC) by end-June.

Shell EP Middle East Holdings B.V. will sell the entire share capital of Shell Iraq B.V. (SIBV), which holds a 19.6 percent stake in the oilfield to a unit of Itochu, the Anglo Dutch company said.

As part of the deal, Itochu will also assume debt of $144 million.

The oil major has received the necessary regulatory consent, and was expected to complete the sale soon, with an effective date of Dec. 31, 2015, Shell said.

A senior Iraqi oil official had told Reuters in January that Iraq had approved the sale.

The West Qurna 1 oilfield, operated by Exxon Mobil Corp (XOM.N), produces around 405,000 barrels per day.

Reporting by Arathy S Nair in Bengaluru, Editing by Sherry Jacob-Phillips

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