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By John Lee.

Lukoil have announced changes to their contract to work on West Qurna-2, following talks with the Iraqi Minister of Oil Abdul Kareem Luaibi.

The new alteration expands the scope of the work to include the Tuba-Fao pipeline, as well as speeding up the process of cost recovery for investors.

The Tuba-Fao pipeline will be 75 miles long when complete and take oil from the West Qurna-2 Tuba tank farm to the Fao tank farm where the oil will be loaded to a single point ship mooring for export.

Of the expanded scope of the work on the infrastructure of the giant West Qurna-2 field, Lukoil president Vagit Alekperov (pictured) was upbeat:

“The Iraqi export system requires upgrading to accommodate growing production due to a number of licensing rounds conducted in recent years. The construction of the Tuba-Fao Pipeline will provide for a direct connection between the West Qurna-2 field and the country’s largest export terminal, creating opportunities for further production growth from the field".

(Source: Rigzone)

By John Lee.

Andrei Kuzyayev [Andrey Kuzyaev] (pictured), head of Lukoil's overseas operations, has said that Lukoil plans to reach commercial levels of oil production at West Qurna-2 in the first quarter of 2014, and is interested in participating in the Kirkuk oilfield in northern Iraq.

He told Reuters:

"There are no infrastructure risks [in Iraq] for today. We have a firm assurance from Iraq's South Oil Company that they will receive all our oil.

"To minimise this risk, we are building three reservoirs of 66,000 cubic metres each in Tuba and a 102-kilometre pipeline to Tuba with capacity of 700,000 barrels per day."

He said Lukoil would start producing West-Qurna's first commercial volumes of oil, above 120,000 barrels per day (bpd), in the first quarter of 2014, when production for the year will stand at over 5 million tonnes (more than 100,000 bpd).

He reiterated that the field would produce 1.2 million bpd at its peak, but the plans were yet to be finalised with the Iraq government.

Lukoil controls 75 percent of the West Qurna-2 oilfield and has been looking for a partner to replace Statoil, which decided to leave the project last year.

Kuzyayev said talks were under way with several partners but the company was "focused on the project implementation" and a need for a partner "is not as acute as it was last year".

He said the company was also looking at other opportunitie in Iraq, including Kirkuk and Nasiriya and new exploration projects; "There are no talks on Nasiriya and on Kirkuk, we are just interested in it (Kirkuk), no more", he said.

(Source: Reuters)

By John Lee.

Indonesia's Coordinating Minister for the Economy, Hatta Rajasa (pictured), has said Pertamina is considering taking a stake of up to 20 percent in the West Qurna-I block, which is owned by Exxon Mobil.

According to a report from Fox Business, Mr. Rajasa told reporters:

"Exxon has got a new oil field in another part of Iraq and because of that it has to sell its stake in the West Tuba [sic] as required by the regulation set by the government of Iraq."

(Source: Fox Business)

By John Lee.

Iraq's South Oil Company has announced the completion of new pipeline network connecting its sites in North West Basra and the floating piers in the Fao [Faw] area, south of the province.

Director General Dhia al-Mussawi told Aswat al-Iraq that the new pipelines will pump oil from storage in Tuba to the coast for export.

(Source: Aswat al-Iraq)

(Picture: South Oil Company HQ)

By John Lee.

In its half-yearly report issued on Thursday, Irish engineering services group Kentz announced that it was recently awarded a new engineering design contract in Iraq.

The company will serve as the main FEED (front-end engineering and design) contractor on the Tuba Project, comprising part of the overall development of the West Qurna (Phase 2) oil field in the south of Iraq, which has an output capacity of 1.8 million barrels of crude per day.

The contract was awarded by Lukoil Mid-East Limited.

(Source: Kentz)

(Picture: Christian Brown, CEO of Kentz)

Entrepose Projets, a 100% subsidiary of Entrepose Contracting, a contractor specialised in the design and construction of complex projects in the oil and gas sectors in particular and the energy and environmental sectors in general, has announced that it has been awarded, within a partnership, a contract in Iraq for the construction of oil storage tanks at Tuba, as part of the West Qurna 2 Project Development for Lukoil, worth a total of circa 61 million US dollars.

Won within the framework of a consortium combining Entrepose Projets (60%) and ROSCO (40%) a construction company in Iraq and a 100% subsidiary of Jurmat Group, this contract is related to the engineering, procurement and construction of three (3) conventional floating roof oil storage tanks with a capacity of 66,000 cubic metres each.

Given its globally-acknowledged expertise in the construction of storage tanks, Entrepose Projets will be the project leader. Completion is scheduled by October 2013.

Dominique Bouvier, Entrepose Contracting’s Chairman and CEO, comments:

“The signing of this new contract reflects the strength of our knowhow and our expertise in the construction of storage tanks. We are also extremely delighted to have, with this Contract, the opportunity for Entrepose Projets to enter the promising Iraqi Oil & Gas market.”

Iraq's cabinet announced that it had approved a $998 million oilfield service contract on Tuesday with a South Korean company for the West Qurna 2 oilfield, according to Reuters.

While the memo did not name the company, Samsung Engineering was the only South Korean company on the final shortlist.

Iraq and its partners, Russia's Lukoil and Norway's Statoil, had shortlisted five companies to compete for the West Qurna Phase Two oilfield development contract.

The other companies were Saipem, SNC Lavalin Group Inc, Punj Lloyd Ltd, Globalstroy Engineering and South Korea's Samsung Engineering, an oil official said.

The tenders announced were for the construction of an oil export pipeline, a tank farm at Tuba, a power distribution station and an associated gas processing plant, and also an oil gathering system, central processing facilities and a water supply system.

They are expected to help production at the field hit 150,000 barrels of oil per day (bpd) in January 2013, an Iraqi oil official said.

(Sources: Reuters, AKnews)

ONGC Videsh Ltd (OVL), the overseas arm of the Indian state-owned Oil and Natural Gas Corp (ONGC), may invest over $ 1.5 billion in exploring for oil in Iraq in a block that was awarded to it by the regime of Saddam Hussein, according to a report in the Economic Times.

“We are nearing finality on the contract for Block-8. It is likely to be signed in next six months,” an official said.

Block-8, located in the western desert in southern Iraq, bordering Saudi Arabia and Kuwait, was awarded to OVL in November 2000. However, the government formed after the US invasion in 2003 sought re-negotiation of the contract which has now been concluded.

The post-Saddam Hussain regime had initially agreed to the signing of a Production Sharing Contract (PSC), where OVL would have got ownership of the oil it produced from Block-8. But the success of post-war licensing rounds, where global majors committed to develop oilfields for a small fee, has reportedly seen Baghdad change track and offer a service contract to OVL.

The block already has a discovery and is estimated to hold 645 million barrels of in-place reserves, of which 54 million are recoverable, he said, adding OVL has committed investing $86 million in two phases of exploration and $ 1.45 billion in development of the reserves thereafter.

The contract would be a service contract whereby OVL will be paid about 18 per cent return on its investment. The company holds a 100 per cent interest in the block.

“We are currently agreeing on finer details of the contract,” the official told the Economic Times.

The service contract now being drawn would be similar to the one China National Petroleum Corp (CNPC) had signed recently for developing Al-Ahdad oilfield in central Iraq.

Baghdad has, however, refused the Tuba oilfield, for which OVL, in consortia with Reliance Industries and Algeria’s Sonatrach, were in negotiations before the US attack on Iraq.

(Source: Economic Times)

Reuters reports that Iraq and its partners, Russia's LUKoil and Norway's Statoil, have shortlisted five companies to compete for the West Qurna Phase Two oilfield development contract.

An Iraqi oil official who asked not to be identified said on Tuesday that the oil service companies selected are Saipem , SNC Lavalin Group Inc , Punj Lloyd Ltd , Globalstroy Engineering and South Korea's Samsung Engineering.

"We are studying the commercial offers and we expect to select a winning company within two weeks," the official said.

Last September, Iraq and its partners issued four tenders for construction and energy projects at West Qurna II, a 12.9-billion-barrel supergiant oilfield in southern Iraq.

The official said seven companies submitted bids, but that two, Petrofac Ltd and Technimont, were rejected. He did not offer any reason for their exclusion.

The four tenders are for the construction of an oil export pipeline; a tank farm at Tuba; a power distribution station and an associated gas processing plant; and an oil gathering system, central processing facilities and a water supply system.

The tenders are part of the initial development plan set by LUKOIL and Statoil and approved by Iraq's oil ministry last year to start production at the untapped oilfield.

They are expected to help production at the field hit 150,000 barrels of oil per day (bpd) in January 2013, the Iraqi oil official said.

West Qurna Phase Two operator LUKOIL is selecting one company to work on an Engineering, Procurements and Construction contract (EPC) for building oil facilities.

(Source: Reuters)