MOSCOW: Russia’s No.2 oil producer Lukoil plans to reach commercial levels of oil production at Iraq’s huge West Qurna-2 oilfield in the first quarter of 2014 and expects smooth exports from the deposit, a company official said.
Andrei Kuzyayev, head of Lukoil’s overseas operations, also confirmed at Reuters Russia Investment Summit this week that Lukoil was interested in participating in the Kirkuk oilfield in northern Iraq and in offshore tenders by Norway.
Lukoil, which is not state-owned, is looking for expansion overseas as Russia becomes increasingly dominated by state-controlled Rosneft, which has been expanding fast since acquiring oil producer TNK-BP earlier this year.
Lukoil’s foreign upstream projects account for 6 percent of the company’s oil output. It expects the figure to rise to 17 percent by 2020 in its total hydrocarbon production.
Kuzyayev said Lukoil would vie in another licensing round for offshore exploration off Norway in 2014, where it has already acquired rights to drill in the icy Arctic waters.
West Qurna-2, the world’s second-largest undeveloped field with recoverable oil reserves of around 14 billion barrels, is crucial for Iraq’s economy.
An oil revival in Iraq after decades of sanctions and wars has slowed this year because of infrastructure and security problems. Unless momentum is regained in the autumn, Iraq could suffer its first annual drop in output for three years. “There are no infrastructure risks for today. We have a firm assurance from Iraq’s South Oil Company that they will receive all our oil,” Kuzyayev said this week.
“To minimise this risk, we are building three reservoirs of 66,000 cubic metres each in Tuba and a 102-kilometre pipeline to Tuba with capacity of 700,000 barrels per day.”
Reuters
