Lukoil in Talks on Developing Giant Oil Field near Basra

Azzaman reports that Russian energy giant Lukoil is discussing with local officials in Basra the details of implementing its contract to develop the West Qurna-2 oil field.

Governor Shaltah Aboud is reported to have promised the Russians “to engage in full cooperation and do his best to remove all obstacles.”

“We have discussed with Russia’s Lukoil and its partner Norway’s StatoilHydro, which have won the contract to develop the giant field of West Qurna-2, ways to solve the problems they might face,” Aboud said.

One important issue is employment – Aboud wants to see Lukoil and StatoilHydro employing as many Iraqis as possible.

“Lukoil expressed readiness to accommodate (certain) numbers of Iraqis and work for their career development,” the governor said. “We are planning more meetings with Lukoil and StatoilHydro on the nature of the services they intend to offer the province’s population.”

The Iraqi government ratified the agreement last month; it will last 20 years with a possible extension of five years. Lukoil has a 56.25% share, StatoilHydro 18.75%, and Iraq’s North Oil Company 25%.

The Qurna oilfield, just 65 kilometers from the port of Basra, has proven reserves of around 13 billion barrels. Under the deal the firms are to substantially raise the field’s output to 1.8 million barrels a day.

Production is expected to start by the end of 2011 and will involve drilling more than 500 wells, but it will take several more years to hit the 1.8 million bpd target. A meeting also took place on Friday between the consortium and the Iraqi Ports Company, to discuss methods of getting the oil to Basra port.

Iraq has the world’s third largest oil reserves, behind Saudi Arabia and Iran, with an estimated 115 billion barrels of proven reserves.

(Sources: Azzaman, Oil & Gas Financial Journal, Aswat Al Iraq)

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