Oil major Royal Dutch Shell has inked an agreement with Iraq to build a petrochemicals plant in the southern oil hub of Basra, Iraqi Industry Minister Nasser al-Esawi said on 28 January.

The deal is reportedly worth $11bn (£7.2bn, €9.7bn).

Esawi told a press conference in Baghdad that the Nibras petrochemicals factory, which is expected to be operational in five to six years, will make Iraq the largest petrochemical producer in the Middle East.

The factory's expected output was not immediately clear, Reuters reported.

Earlier in the month, the oil giant agreed to pay a Nigerian fishing community £55m as compensation for its role in the worst oil spill in Nigeria's history, according to both parties.

Shell said that a major remediation operation will take place in the coming months, following an initial clean-up phase, but did not reveal how long this will take, nor how much it will cost.

The settlement ended a three-year legal battle. While armed gangs tapping pipelines have often been blamed for leaks in the region, Shell has accepted that the Bodo spills were caused by corrosion, Reuters reported.

Shell, which is one of the main oil majors operating in the south of Iraq, signed a memorandum of understanding with the ministry for the Nibras project in 2012.

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