Lukoil About to Award Contracts at West Qurna 2

Dow Jones reports that Lukoil and its partners are about to award a feast of contracts to international engineering and construction companies as it moves full speed ahead with development of its supergiant West-Qurna Phase 2 in southern Iraq.

The company is in the final stages of evaluating commercial and technical bids for contracts competing to build the central processing facility, or CPF, export pipelines, tank farms, and a 126-megawatt power station.

A senior Lukoil executive told Dow Jones Newswires, "we have received the bids. We have been evaluating them and expect to award the contracts very soon". He expected all packages to have been awarded in the coming weeks.

According to other sources, five companies had been shortlisted: Saipem , SNC Lavalin Group Inc , Punj Lloyd Ltd , Globalstroy Engineering and South Korea’s Samsung Engineering.

Two other bidders, Petrofac and Technimont, were said at the time to have been dropped.

The biggest package will be the construction of the CPF which will enable the consortium to produce 400,000 barrels of oil a day from West Qurna-2 by 2014 as part of the first-stage development of the field.

First output of about 150,000 barrels a day will flow in 2013 and then rise rapidly as more wells are tied in, officials from the consortium said.

Lukoil awarded in August a contract to Baker Hughes to drill 23 new wells in the field. "Drilling in the first well started three weeks ago," the executive said.

Lukoil, along with Norway's Statoil and Iraq's state South Oil Company were awarded the 20-year service contract for West-Qurna 2 in Iraq's second licensing round in December 2009.

It is a green field that has yet to produce any oil, but the firms promised to get the southern Iraqi field pumping at a rate of 1.8 million barrels a day for payment of $1.15 a barrel.

(Sources: Dow Jones)

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