"It would be fair to say the progress has been slower than we originally hoped," Mark Carne, executive vice president, Middle East and North Africa, at Shell Upstream International. "But I am very pleased with how the project is developing."

Asked if the 2012 target of 175,000 barrels per day could slide into next year, Carne said: "It is certainly plausible."

Wary of losses, Shell has asked Iraq for a waiver to start recovering costs if Majnoon, which is shut for maintenance, does not meet its first commercial production target by year-end - a contract requirement before costs can be retrieved, according to documents seen by Reuters.