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Lukoil Targets 150,000 Barrels per Day from West Qurna-2

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OAO Lukoil Holdings, Russia's largest non-state oil producer, aims to produce 150,000 barrels of oil a day at Iraq's supergiant West Qurna-2 oilfield by the end of December 2013, a company executive said Tuesday. 

The 13-billion-barrel field is expected to raise output to 400,000 barrels a day by April 2014 and to hit 550,000 barrels a day in 2015, the executive told Dow Jones Newswires. 

Lukoil will invest $1 billion in 2013 to start first production from the green field, located in the Basra governorate near the Iranian border, he said. Last year the company invested a similar amount, putting total investment in the field by the end of this year at $2 billion. Lukoil had said that it would invest a total of $30 billion to upgrade the field. 

To date the company has drilled eight production wells and is planning to drill another 27 wells this year, he said, adding that four rigs are drilling in the field. 

In January, Lukoil signed a supplementary agreement with Baghdad to reduce the project's target production and prolong its duration. The agreement also put on record the transfer to Lukoil of Statoil ASA's participation interest of 18.75% in the project. 

The parties agreed to reduce the project's target production level to 1.2 million barrels a day from 1.8 million barrels a day, and to prolong the validity of the contract to 25 years from 20. 

The company has increased its stake in the West Qurna-2 project in Iraq to 75%, following last year's withdrawal of Statoil. Iraq's state-owned North Oil Company owns 25%. 

Operator Lukoil and Statoil were awarded the technical service contract at West Qurna-2 in December 2009.

Copyright (c) 2012 Dow Jones & Company, Inc.

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