Russia’s Lukoil says it should reach production of 400,000 barrels per day at its West Qurna-2 field in Iraq by the fall—figures that will more than double Lukoil’s overseas output.
West Qurna-2 is set to go online in March and will initially produce 120,000 barrels a day, with a target of 400,000 barrels by the end of 2014.
Lukoil is Russia’s second-largest oil producer, West Qurna-2 is the world's second-largest undeveloped field with recoverable reserves estimated at around 14 billion barrels.
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Lukoil holds a 75% stake in the field, while state-owned North Oil Company holds the remaining 25%. Norway’s Statoil sold its 18.75% interest in the project to Lukoil recently.
The West Qurna-2 announcement follows an amended production pact signed with the Baghdad government in late 2012 that cut the field’s output target from 1.8 million to 1.2 million bpd while extending the plateau production period. The Iraqi government has decided to cut peak oil production in order to prop up oil prices and help its economy.
Start-up of West Qurna-2 will boost Iraq’s bid to increase output by 45% to 4.5 million bpd by the end of this year.
Baghdad’s ambitious target specifically excludes production from the Kurdistan region.
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According to the Economist Intelligence Unit, Iraq is ramping up oil exports this year, with the draft budget anticipating exports of 3.4 million barrels per day—or a 30% increase over last year. This is despite the fact that the country is sliding into civil war and embroiled in political struggle with its semi-autonomous Kurdistan region, which is increasingly going it alone in terms of oil and gas exports.
The bullish prognosis is largely based on new sources of production coming online in the south of the country, and the easing of infrastructure bottlenecks.
By. Joao Peixe of Oilprice.com