Lukoil interested in Iraq geological exploration licenses - Alekperov
MOSCOW. June 15 (Interfax) - Lukoil is interested in obtaining geological exploration licenses to territories in Iraq.
Lukoil President Vagit Alekperov made the comment during a telephone conversation with Iraqi Oil Minister Abdul Kareem Luaibi in Moscow on Wednesday.
The Oil Ministry is announcing a fourth licensing round, to include at least 12 geological exploration sections. "Of course, we are interested in expanding our operations," Alekperov said in a video posted on Lukoil's web site.
Alekperov also proposed a project to build a power plant in Iraq fired with associated gas from the West Qurna-2 field, Lukoil said in a press release. They also discussed progress in West Qurna-2 and the outlook for expanding infrastructure for transporting oil from the field.
West Qurna-2, located 65 kilometers northwest of Basra, contains about 14 billion barrels of recoverable oil reserves. A consortium of Lukoil and Norwegian Statoil won the tender on rights to develop the field in December 2009. They signed the contract on development of the field - for 20 years with an option to extend for five years - in January 2010. Lukoil has a 56.25% interest in the project, Statoil has 18.75% and the Iraqi state oil company has 25%. The investors will receive a fee of $1.15 per barrel with production at 1.8 million barrels per day.
All of the oil produced at the field will be the property of Iraq's Southern Oil Company. The foreign oil companies will begin receiving the per-barrel fee once production rises to 120,000 bpd. The field contains no natural gas. Any associated gas produced will be used to generate electricity.
Lukoil originally planned to begin drilling at West Qurna-2 in late 2010. That date has since been moved back, first to the spring of 2011 and then the summer. The start date for oil production has also been postponed, to early 2013 from the originally scheduled late 2012
This year Lukoil will carry out 3D seismic work, drill two appraisal wells and begin drilling for the first oil phase (four wells). Production is scheduled to reach 1.8 million barrels per day in 2017.
Lukoil estimates investment will exceed $3 billion by the time first oil is being produced. It plans to produce 150,000 bpd at the field initially, rising to 500,000 bpd subsequently.
The organizational stage of the fourth licensing round will continue throughout 2011. Contract signings are planned for January 2012. A total of 12 exploration sections will be offered, including seven potential gas sections and five oil sections. TNK-BP has said it will bid in the round.
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