Lukoil to invest $4 bln in West Qurna-2 in 2013
MOSCOW. Oct 9 (Interfax) - Oil company Lukoil plans to invest $4 billion in Iraqi field West Qurna-2 in 2013, Lukoil vice-president and the head of Lukoil Overseas, Andrei Kuzyayev, told journalists on Tues.
"We will invest $4 billion in the project next year," he said.
Total investment in the project's first phase is estimated at $4.5 billion. Around $600 million to date has been invested.
Lukoil plans to start production of "early oil" at the project in 2013.
LUKOIL Mid-East Ltd (the operator of the West Qurna-2 project) signed several major contracts in spring of this year for the field's development, including contracts with South Entrepose Projets/Rosco Korea's Samsung Engineering, Turkey's ENKA Insaat, and French-Jordanian consortium. The contracts were signed under turn key terms, according to which, subcontractors guarantee the design and construction of the facilities, as well as the supply of necessary materials and equipment.
In April 2012, Lukoil started production drilling at the field. Once daily output has reached 150,000 barrels, Lukoil will receive compensation for its costs and bonuses. After the compensation of initial expenditures, the project will become self-financing.
"Total investment in the full-scale implementation of the project will total around $25 billion," Lukoil president Vagit Alekperov earlier said.
A consortium with Lukoil and Norway's Statoil won the tender to develop the West Qurna-2 field in Iraq in December 2009. A contract for providing exploration and production services at the field was signed at the end of January 2010. The remuneration for investors will come to $1.15 per barrel with daily production expected at 1.8 million barrels. The contract will last for 20 year with an option for prolongation for five years. Lukoil owns 56.25% in the contract, Statoil - 18.75% and Iraqi state company - 25%. West Qurna-2's recoverable resources come to around 13 billion barrels of oil. The field is located in southern Iraq 65 kilometers to the northwest of Basra.
West Qurna-2 field was discovered by Soviet geologists in 1973. It is the second biggest undeveloped field in the world with around 14 billion barrels in oil reserves.