Shell said Wednesday it would exit Iraq's giant Majnoon field project after long-running talks on a planned output expansion from current levels of 220,000 b/d appeared to founder.

Under a timeline yet to be finalized, Shell said it has agreed an "amicable and mutually acceptable release" of its interest in Majnoon, which lies in southern Iraq near the Iranian border.

"Shell remains otherwise firmly committed to Iraq ," Shell said in an emailed statement. "By leaving Majnoon, Shell will be in a stronger position to focus its efforts on the development and growth of the Basrah Gas Company, and the Nebras Petrochemicals Project," Shell said referring its other Iraqi projects.

Shell would be the first major oil company operating an oil field under Iraq 's technical service contract model to exit a project. Statoil, a junior partner to Lukoil in West Qurna 2, exited in 2012 as part of a global withdrawal from hot zones after security incidents elsewhere.