A decision by Royal Dutch Shell to boost its divestment strategy by leaving one of the larger oil fields in Iraq is a sign of investment risk, an analyst said.

Shell's Middle East subsidiary said it agreed to sell the entire capital in its Iraqi division to Japan's Itochu Corp. for $406 million. The deal includes Shell's 19.6 percent stake in the West Qurna 1 oil field in southern Iraq.

"Iraq is an important country for the Shell Group, and exiting West Qurna 1 allows us to focus our resources on other assets in our Iraq portfolio," Shell's Upstream Director, Andy Brown, said in a statement.

Exxon Mobil had an agreement with Iraqi state oil companies and Royal Dutch Shell to develop the West Qurna oil field in southern Iraq. Production there reached a milestone more than five years ago at close to 300,000 barrels per day.

The Japanese company said it's already received the necessary approvals for the transaction, including a sign off from Iraqi state-owned Basra Oil Co. West Qurna 1 is one of the largest oil fields in the world, with a recoverable reserve estimate of more than 20 billion barrels.

Ian Thom, a principle analyst of exploration and production in the Middle East and North Africa at consultant group Wood Mackenzie, said in response to questions emailed by UPI the move shows an increasing interest by Asian players in the regional market.

"The risk for Iraq is that tough fiscal terms result in sub-optimal outcomes as the pool of prominent operators willing to invest shrinks," he said.

Exxon Mobil stays on with the operator of the field with a 32.7 percent stake. Apart from Itochu, China's PetroChina holds a 32.7 percent stake, Indonesia's Pertamina holds a 10 percent stake and Iraq holds 5 percent.

Shell is in the midst of a $30 billion divestment program, slimming down after a 2015 mega-merger with British energy company BG Group. The Dutch supermajor said it remains committed to Iraq, but with a focus on natural gas.

"Shell's other businesses in the country will not be affected by this divestment," the company said.

Shell last week sold its interest in gas-producing fields and associated infrastructure in New Zealand to Austrian energy company OMV for $578 million. The deal included the sale of a stake in the Pohokura field, the largest gas producing field in New Zealand.

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