Lukoil said Nov. 2 it had signed with Iraq’s state-owned Basrah Oil Co. an agreement to extend its oil service contract for West Qurna 2 field by 10 years to 2045 and double oil production from the asset to 800,000 b/d.
“The agreement provides for better conditions and prolongation of the service contract for 10 years (until 2045), investments into further development of the project, and gradual doubling of the field’s output with plateau level reaching 800 thousand barrels per day,” Lukoil said in a statement.
“The field development plan envisages bringing new multi-well pads into production, commissioning oil treatment facilities and complex gas treatment facilities for the Yamama formation, construction of export pipelines and water flooding units, as well as expansion of the tank battery.”
Lukoil did not disclose when the 800,000 b/d plateau level will be reached. Lukoil is the operator of West Qurna 2 field with a 75% stake and the remainder is held by state-owned North Oil Co.
West Qurna 2, which is among Iraq’s mega fields located in the south, has recoverable reserves of around 14 billion barrels, with more than 90% of those resources located in Mishrif and Yamama reservoirs, according to Lukoil’s website.
In 2010, Lukoil signed an oil service contract for the development of West Qurna 2, with commercial production starting in 2014. Iraq has a production capacity of less than 5 million b/d, but it is seeking to boost that capacity to 7 million b/d in the next couple of years with the help of international oil companies.
Most of the increment is expected to come from the mega southern fields, including BP-operated Rumaila, Eni-operated Zubair and ExxonMobil-run West Qurna 1.
Eridu field development
In March, Iraq’s oil minister Hayan Abdul-Ghani said Lukoil and Japan’s INPEX plan to start production from the country’s Eridu field in 2025, which is close to the West Qurna 2, at a rate of 30,000 b/d, with plans to hit a peak of 250,000 b/d at an unspecified point in the future. The field, located in Block 10 in southern Iraq, is one of the largest discoveries in Iraq over the last 20 years.
Lukoil is operator and holds a 60% stake in the field, which has estimated reserves of 12.9 billion barrels. INPEX, Japan’s biggest upstream company, holds the remaining 40%, with state-owned Thi-Qar Oil Co. being the contract party overseeing the project for the Iraqi government.
Lukoil and INPEX won exploration rights for the project in Iraq’s fourth licensing round in 2012. Block 10 is located in Thi-Kar and Mutanna provinces, 120 km west of Basrah. In 2017, the Eridu 1 well at Block 10 confirmed a major hydrocarbon deposit.
Source: S&P Global