Lukoil begins production drilling in Iraq
MOSCOW. April 25 (Interfax) - Russian oil major Lukoil began on Wednesday to drill production wells at the West Qurna-2 deposit in Iraq, the company said in a press statement.
Taking part in ceremonies marking the event were Iraqi Oil Minister Abdul Karim al-Luaibi, the heads of Basra province, South Oil Company (Iraq) Lukoil Overseas, and the companies' main subcontractors - Baker Hughes and Samsung Engineering.
The production drilling project involves the building of 23 directional wells. The drilling will be conducted simultaneously at five well pads with state-of-the-art diesel electric units with a bearing capacity of 450 tonnes, making it possible to drill wells to a depth of up to 5,000 meters without equipment having to be remounted, Lukoil said.
The installations have been specially modified for speedy repositioning at the well pads by means of cluster slider rigs. Down the road, drilling will be done at another four cluster sites with the same sort of rigs.
"The Central Processing Facility will be constructed along with facilities for well-pad infrastructure development and oil gathering lines, as well as water and power supply systems, shift camp and a number of other infrastructure and support facilities," Lukoil said.
"We have opened the active field development stage today. Upon reaching the production volume of 150,000 barrels per day LUKOIL will receive the right to reimburse expenses and receive remuneration. After the initial expenses are reimbursed, the project will turn into a self-financing entity. The total investments in the full-scale project implementation will come to around $25 billion', Lukoil chief Vagit Alekperov is quoted in the statement as saying.
"The West Qurna-2 field, discovered in 1973 with the help of Soviet geologists, is the world's second largest undeveloped field with recoverable oil reserves of around 14 billion barrels. The field, covering an area of 340 square kilometers, is located in the southern part of Iraq, 65 kilometers to the north-west of Basra, a major seaport. The Development and Production Agreement for the West Qurna-2 field was signed on January 31, 2010 for a 20-year period with the possibility of 5-year extension. The project parties have the following shares: LUKOIL, 56.25%, Iraq's state-owned North Oil Company, 25%, and Statoil ASA, 18.75%," the statement says.