Russia's second largest oil producer enters first week of operations in Iraq
Russia's No.2 oil producer Lukoil has started commercial production at the West Qurna-2 oil field, one of the largest in the world located 65 km from the Iraqi town of Basra.
As per the contract, Lukoil must maintain that level of production for the next 90 days to begin receiving a return on its investments.
The official ceremony was attended by Hussain al-Shahristani, Deputy Prime Minister of Iraq, Arkady Dvorkovich, Deputy Prime Minister of the Russian Federation, Vagit Alekperov, President of OAO Lukoil and other Iraqi government authorities.
Speaking at the launch, Alekperov announced that Lukoil had reached the target production level of 120,000 barrels per day (kbpd) on March 28.
West Qurna-2 boasts of 35 billion barrels of estimated geological oil reserves in two main formations – Mishrif and Yamama.
The project is being implemented in three phases: Mishrif Early Oil (with a target production level of up to 400 kbpd), Mishrif Full Field Development (up to 550 kbpd) and Yamama Formation Development (up to 1.2 million barrels per day (mmbpd)). The production plateau will then be maintained at 1.2 mmbpd for 19.5 years.
The development and production service contract for the West Qurna-2 field was signed on January 31, 2010. The stakeholders are the South Oil Company of the Ministry of Oil of Iraq (on behalf of the state) and a consortium of contractors comprising Lukoil (75 per cent) and the Iraqi North Oil Company (25 per cent).
"The start of production at West Qurna-2 is strategically important for us," remarked Alekperov.
"Starting up the field on a tight schedule and reaching the target production level underscores Lukoil’s ability to independently and efficiently manage the implementation of complex large-scale projects and reinforces our position as a global energy company," he added.
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