Lukoil Earmarks $4.5bn for West Qurna 2

Russia’s Lukoil aims to produce 120,000 barrels of oil a day at Iraq’s   field by the end of 2012, and is seeking customers for the fuel in Asia, according to a report from BusinessWeek.

The Moscow-based company plans to begin selling crude from the field in 2013, Paul Hawkins, director of supply and trading at Litasco (Lukoil International Trade and Supply Company) said in a presentation in Singapore on Wednesday. Lukoil won rights in December to develop phase 2 of the West Qurna deposit together with Norway’s Statoil.

West Qurna 2 is likely to yield heavy, sour crude from the Mishrif reservoir during the early stages of production. Lighter, sweeter crude from the Yamamah reservoir in the same deposit is set to begin production later and be marketed from as early as 2016, Hawkins said.

The lightness or heaviness of oil refers to how thick it is, a key consideration for refiners. Sourness or sweetness refers to how much environmentally harmful sulfur it contains. Lighter, sweeter crudes are typically easier to refine and command higher prices.

Lukoil plans to invest $300 million in the field this year, with as much as $4.5 billion earmarked for the next four to five years, Hawkins said. Output from the field is set to rise to 650 million barrels a year by 2017, he said.

(Source: BusinessWeek)

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