Page 4 - MEOG Week 35 2021

MEOG COMMENTARY MEOG

Lukoil gets back

to work on Iraqi

output boost

Having recently retracted its intention to sell its stake in the West Qurna-2 oilfield,
Lukoil is moving ahead with plans for a significant production hike at the southern field

IRAQ RUSSIA’S Lukoil last week announced that it that the government intends to raise oil produc-
intends to increase oil production at the West tion from the current 5mn bpd level to 8mn bpd
Qurna-2 project in southern Iraq, providing sta- within the next six years.
WHAT: bility for Baghdad as it seeks to raise output by
Lukoil is pressing forward 3mn barrels per day (bpd) by 2027. Convinced to stay
with efforts to increase During a conference call on August 27, the The company had been reportedly looking to
oil production from company’s VP for finance Pavel Zhdanov said sell its 75% stake in the technical service con-
West Qurna-2 by around that Lukoil hoped to achieve 480,000 bpd, an tract (TSC) for the project to Chinese compa-
80,000 bpd. increase of around 80,000 bpd as the Phase 3 nies, with a price of $1.4-1.5bn touted. However,
Yamama expansion comes into play. last month Abdul Jabbar said that around six
WHY: “Next development stage of the project is to months of discussions between the Ministry of
The news is significant reach production of 480,000 bpd,” he said. “Next Oil (MoO) and the Russian firm had “contrib-
for Baghdad, which has year we will increase production from the cur- uted to the company’s official retraction from its
been struggling to keep rent 400,000 bpd to 450,000 bpd at the Mishrif desire to offer part of the shares for trading for
operators in place across formation.” He added: “This year, we plan to start sale to other companies”.
its largest oilfields. 30,000 bpd production from pilot wells of the The oil minister noted that the ongoing efforts
Yamama formation.” by IOCs to leave the country is because “invest-
WHAT NEXT: This follows the drilling of a three-well pilot ment in Iraq is not appropriate for the major
The Russian company is oil programme targeting the Yamama to produce investors and that they either look for other mar-
seeking to double output 10,000 bpd per well over a three-month period. kets or partners in the renewable energy”.
at WQ-2 to 800,000 bpd Zhdanov noted that Q2 production had been However, he added: “Understanding the
by 2030 while working below capacity at around 350,000 bpd owing to motives of (Lukoil) has contributed to develop-
to achieve 250,000 bpd OPEC+ restrictions on output, but this marks ing solutions in co-ordination with the Ministry
of production at Eridu an improvement from Q1, when oil flows ran of Oil for some of the problems that the company
in Block 10 a few years at 307,500 bpd as the cartel’s cuts began to ease. believes have changed positively for the benefit
earlier. The move comes shortly after an announce- of both parties.”
ment by Iraqi Oil Minister Ihsan Abdul Jabbar Nevertheless, Lukoil’s plans appear to remain

P4 www. NEWSBASE .com Week 35 01•September•2021