Page 10 - MEOG Week 43

MEOG PROJECTS & COMPANIES MEOG

Lukoil eyes Iraqi output increase

IRAQ RUSSIA’S Lukoil intends to increase its oil pro- voluntary additional oil production cuts to
duction in Iraq once output restrictions imposed 400,000 bpd below its 3.8mn bpd ceiling in
by the OPEC+ group have been lifted. August and September to make up for previous
Speaking to Bloomberg last week, Lukoil non-compliance with OPEC+ cuts, data sug-
Mid-East’s managing director Egor Zubarev said gests that Iraq has yet to make much progress
that the company had cut production to 280,000 with this.
barrels per day (bpd) from the supergiant West Baghdad has been the worst offender among
Qurna-2 oilfield in accordance with a request OPEC+’s overproducers and rumours have
from the Ministry of Oil (MoO) in Baghdad. been circulating that it is seeking to negotiate an
Last year, output from the asset was running exemption from the deal given the economy’s
at 400,000 bpd, with work ongoing to drill new massive reliance on oil revenues. However, it
wells as part of the field’s phase two development. has so far faced mounting pressure from Saudi
“The current situation forces us and our part- Arabia and other OPEC+ members to adhere
ners to revise our plans to see how they corre- to the promised cuts. Iraqi output has decreased
spond to the needs of the time,” he said. in recent months, though not by anywhere near
Lukoil had intended to raise production from the total promised reduction of 1.06mn bpd.
WQ-2 to 480,000 bpd by the end of the year. According to the Ministry of Oil (MoO), pro-
However, Baghdad called on IOCs to cut out- duction was 4.07mn bpd in May, 3.7mn bpd
put from their southern fields by 350,000 bpd, in June, 3.69mn bpd in July and 3.69mn bpd in
while Basra Oil Co. (BOC), which is responsible August. Output rose by around 1.3% during Sep-
for the southern region, is expected to reduce tember. Meanwhile, Zubarev added that Lukoil
output by the remaining 300,000 bpd. intends to submit proposals to the Iraqi author-
Despite having promised to increase ities “soon” for the development of Block 10.™

Indian developers lose Farzad-B

IRAN INDIA’S state-run developers are reportedly “We gave them multiple ultimatums, includ-
set to lose out on the development of Iran’s shal- ing last year, but probably they had no problem
low-water Farzad-B natural gas field to domestic in losing the project, and being subservient to the
developers. US,” Turkey-based Anadolu Agency quoted an
ONGC Videsh Ltd (OVL), the overseas arm unnamed source in Tehran as saying on Octo-
of state-run Oil and Natural Gas Corp. (ONGC), ber 21.
discovered the field in 2008 in partnership with The source added that the Iranian govern-
Indian Oil Corp. (IOC) and Oil India Ltd (OIL). ment had invited India to negotiate the project’s
OVL operates the field, which is located development on multiple occasions, adding:
within the 3,500-square km Farsi block, with a “India should have responded to Iran’s invitation
40% interest, while IOC owns 40% and OIL con- and given in writing their interest in the project.
trols the remaining 20%. The block lies in water It appears they just wanted to buy time to see if
depths of 20-90 metres in the Persian Gulf, while the sanctions are lifted.”
the field is estimated to contain 12.8 trillion cubic PTI’s sources said OVL had continued talking
feet (362.5bn cubic metres) of gas. to NIOC following the February revelation and
State-owned National Iranian Oil Co. had sought proposed contract terms and con-
(NIOC) indicated in February that it wanted a ditions, but “Iran has so far not responded” to
local developer to take over the field’s operations, those requests.
Indian newswire PTI cited anonymous sources “We offered them many concessions and
as saying on October 19. waited for too long for them to join the project,”
NIOC subsidiary Petropars said over the Andalu’s source said. “But it is clear that they
weekend that it had been awarded the contract don’t wish to antagonise their friends in US.”
to develop the field. The source added that Iran wants to proceed
Despite the exploration phase of the Farsi with the development of the field given concerns
contract having expired in 2009, negotiations about shared development of the Persian Gulf’s
between the Indian consortium and the Iranian resources.
government have floundered over the years, with “We share gas fields with other countries like
difficult terms and international sanctions cited Qatar and they have been doing the extraction
as major stumbling blocks. for years,” the source said.™

P10 www. NEWSBASE .com Week 43 28•October•2020