Lukoil puts 250 mln barrels in Iraqi oil on balance sheet
PERM. Mar 1 (Interfax) - Russian oil company Lukoil put 250 million barrels in Iraqi oil reserves on its balance sheet for 2010, the company's vice president and president of Lukoil Overseas, Andrei Kuzyayev, told Interfax.
He also said that Lukoil plans to start drilling in Iraq in the first half of 2011. "We will already be drilling this year, in the first half. Nothing has changed for us so far," Kuzyayev said.
He said that the exact dates for the start of drilling in Iraq would be set after the results for a subcontract tender are tallied, which should take place in several days. Kuzyayev said that the company has adjusted its contract strategic. He declined to identify what essentially has been changed in this regard.
Kuzyayev said last year that the company hopes to put up to 100 million tonnes in Iraqi oil reserves on its balance sheet from the West Quarna-2 oil field.
With a tonne to barrel ratio of 7.3, the company current has around 30 million tonnes in Iraqi oil reserves on its balance sheet.
The company told Interfax that reserves at the field would be changed during development. The current figure was calculated according to SEC standards, which is limited to the first stage of the field's development. "The size of reserves now on the balance sheet is insignificant. During the field's development and auditing of reserves according to international standards, this figure will likely be increased," a company representative said.
Lukoil planned to start drilling at the end of 2010 but this was moved to spring of this year.
A consortium consisting of Lukoil and Norway's Statoil became the winner of a tender for the rights to develop the West Quarna-2 field in Iraq. A contract for development and production services was signed at the end of January 2010. The premium for investors for each barrel of oil will come to $1.15 with daily output at 1.8 million barrels. The contract has duration of 20 years with an option for a five-year extension. Lukoil has a 56.25% interest in the contract, Statoil - 18.75% and the Iraqi state company - 25%.
The West Quarna field was around 13 billion barrels in recoverable reserves. The field is located in southern Iraq, 65 kilometers to the northwest of Basra.
According to the company's own estimates, investment in the West Quarna-2 field could come to $30 billion, of which $20 billion will be earmarked directly for production. Lukoil's investment in the field for 2010 was earlier estimated at around $300 million. Investment for the next four or five years is put at $4.5 billion.
The company plans to start production of oil in Iraq by the end of 2012. Lukoil hopes to reach its target production rate of over 90 million tonnes a year in 2017. The plan for the field's development foresees additional seismic surveys and the drilling of over 500 wells.