By John Lee.
In its latest Half Yearly Report, Russia’s Lukoil reports that in the first half of 2015, the Group accrued revenue from the West Qurna-2 project in the total amount of $1,535 million, consisting of cost recovery of $1,475 million and remuneration fee of $60 million, compared to the revenue of $1,179 million in the first half of 2014.
This revenue was classified as crude oil sales revenue. Attributable amount of 4,412 thousand tonnes, or 30,260 thousand barrels, of crude oil was included in Group’s crude oil production for the first half of 2015 (1,781 thousand tonnes, or 12,218 thousand barrels in the first half of 2014) that represented approximately 52% of total production from the field (65% in the first half of 2014).
In the first half of 2015, the company received 4,769 thousand tonnes of crude oil from the Iraqi party as a debt settlement within the cost compensation. This crude oil at cost of $1,683 million was recognized in Cost of purchased crude oil, gas and products.
Subsequently, Lukoil sold this crude oil to third party customers or delivered it to its refineries.
During the first half of 2015, the cost compensation increased the Group’s EBITDA by $1,072 million ($1,017 million in the first half of 2014).
The project’s target production level is 1.2 million barrels per day and the total term of the contract is 25 years.