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LUKOIL Recovering Costs From West Qurna-2

The Sea Triumph, an oil carrier chartered by LITASCO (LUKOIL‘s international marketing and trading arm) has departed the port of Basra in Southern Iraq with the first batch of oil as part of the recovery of LUKOIL’s costs from the West Qurna-2 project.

The shipment volume amounts to 1 million barrels of oil. The vessel is headed for the port of Augusta, Sicily. After being unloaded, the oil will be transported to LUKOIL’s ISAB refinery in Priolo for processing.

Production at the West Qurna-2 field currently exceeds 280 thousand barrels per day. The project’s development is on schedule with LUKOIL successfully fulfilling all of its contractual obligations.

(Source: LUKOIL)

(Picture credit: Essam al-Sudani, www.essampxiraq.com)

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LUKOIL Starts Returning Investment on West Qurna-2

A crude carrier chartered by LITASCO (LUKOIL’s international marketing and trading arm) arrived today (Wednesday) in South Iraq’s port of Basra to receive the first batch of oil as part of the recovery of LUKOIL’s costs from phase one (“Early Oil”) of the West Qurna-2 project.

The vessel will spend several days in the port to load one million barrels (about 160 thousand tons) of oil. It is the first crude carrier to transport buy-back oil that belongs to LUKOIL in accordance with the terms of the West Qurna-2 Service Contract.

Meanwhile production at West Qurna-2 has reached a level of 280 thousand barrels per day. The project is continuing according to plan with LUKOIL successfully fulfilling its contractual obligations.

The loading of this crude carrier provides further evidence of the reliable partnership between LUKOIL and the Iraqi side in developing the country’s oil industry,” said Andrey Kuzyaev, Vice President of LUKOIL and President of LUKOIL Overseas.

(Source: LUKOIL)

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Lukoil to Invest $30bn at West Qurna-2

By John Lee.

Ravil Maganov (pictured), who oversees Lukoil‘s exploration and production, has said total investment in the West Qurna-2 field was expected to exceed $30 billion.

At its peak in 2019, he said he expects oil production at the field to hit 1.25 million bpd.

The world’s second-largest undeveloped field, with recoverable oil reserves of around 14 billion barrels, started production in March.

(Source: Reuters)

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LUKOIL Qualifies for Iraq Payment

LUKOIL Overseas (the Operator of LUKOIL’s overseas upstream projects) has informed Iraq’s Ministry of Oil that it has fulfilled its contractual obligations for first commercial production at West Qurna-2.

LUKOIL, the Operator of the West Qurna-2 project, successfully maintained an average daily production of at least 120 thousand barrels for 90 days, entitling it to begin recovering costs and receive remuneration.

Daily oil production at West Qurna-2 is currently above 200 thousand barrels.

Andrey Kuzyaev (pictured), Vice President of LUKOIL and President of LUKOIL Overseas, said:

“The West-Qurna-2 project is developing at a fast pace, and production is going up. As of today, the project has reached another milestone by paving the way for LUKOIL to receive contractual remunerations.

“Timely cost recovery for the Early Oil phase will enable the Operator to proceed to active implementation of the subsequent phases of the field development.

(Source: LUKOIL)

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West Qurna-2 hits 200,000 bpd

By John Lee.

Lukoil boss Vagit Alekperov (pictured) has told journalists that production at the West Qurna-2 oilfield has reached 200,000 bpd, from a starting volume of 120,000 bpd two months ago.

He added:

By the end of the year according to obligations 400,000 will be reached. Today there is no doubt that 400,000 will be reached by December.

(Source: Reuters)

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Southern Oil Exports “on Track for Record”

By John Lee.

According to shipping data tracked by Reuters, oil exports from Iraq’s southern terminals are heading for a record high in April.

An average of 2.55 million barrels per day were shipped in the first 23 days of April, which if sustained would top February’s 2.50 million bpd, the highest since 1979.

Southern exports are being boosted by the start of production at Lukoil‘s West Qurna 2 oilfield (pictured).

In the north of the country, however, shipments of Kirkuk crude are reported to be still stalled due to a bomb blast on 2nd March, and traders are not expecting flow to resume for some weeks yet.

Without exports from the Kirkuk fields via pipeline to Turkey, overall shipments are set to be below February’s rate of 2.8 million bpd, which Deputy Prime Minister for Energy Hussain al-Shahristani described as a record.

(Source: Reuters)

(West Qurna-2 picture by Essam al-Sudani)

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West Qurna 2 Begins Production

By John Lee.

Iraq’s giant oil field West Qurna 2, with a minimum 14 billion barrels of recoverable reserves, began production on Saturday as Lukoil opened spigots to put 140,000 barrels a day onto the market.

By the end of the year the field is set to produce 400,000 bpd, putting Iraq on track for its production target for this year of 4 million bpd.

If fully developed, West Qurna 2 could produce 1.2 million bpd for 20 years and the start of production at the field was described as “strategically important” by Lukoil chief executive Vagit Alekperov (pictured.)

Lukoil have a 75% stake in the operation with the remainder owned by Iraq’s South Oil Company.

Some analysts have noted how Iraq’s rising production could spark tensions with OPEC, as the country is now already moving outside of OPEC production quotas, set to keep prices stable.

(Source: Al Arabiya)




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Thales to Provide Security System at West Qurna

Thales has been awarded a contract to provide an Integrated Security System (ISS) for the West Qurna-2 oil field development located 65 km northwest of Basra in Southern Iraq.

This contract has been signed with LUKOIL Mid-East Ltd, a subsidiary of the Russian oil company LUKOIL.

Thales will design and deploy the Integrated Security System over the security perimeter surrounding the West Qurna-2 area, protecting LUKOIL Mid-East personnel and assets, including well pads, central processing facilities, gas treatment facilities, produced water treatment, all related offsites and utilities, storage tanks and living camps.

Thales´s Integrated Security System will include a number of innovative technical solutions as well as a command & control centre to assure supervision and control of day-to-day security operations and comprehensive protection from operational incidents and threats.

Thales is also part of the international consortium that was awarded another contract by LUKOIL Mid-East Ltd at the end of 2013 for spare parts supply and maintenance assistance at the existing and future security installations of LUKOIL´s West Qurna-2 oil field development.

Dominique Gaiardo, Vice President Protection Systems, commented:

These two contracts are important milestones because they are Thales’s first deals with LUKOIL, Russia’s largest privately owned oil business group and a major international, vertically integrated oil & gas company.

“In addition, these awards continue to confirm that Iraq is an important geographical market for Thales.

(Source: Thales)

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