Lukoil agrees to limit West Qurna-2 output to 800,000 bpd

MOSCOW, Sep 1 (PRIME) -- Russian oil company Lukoil and Iraq have agreed to limit production on the West Qurna-2 project to 800,000 barrels daily, Oil Minister Jabbar al-Luaibi told reporters on Friday after negotiations with Lukoil CEO Vagit Alekperov.

“The initial contract envisaged production of 1.8 million barrels a day but later the figure was reduced to 1.2 million barrels daily. We have agreed now on a new target level of 800,000 barrels per day. We think that this is the best level both for Lukoil and Iraq,” he said.

Lukoil operates two projects in the country -- West Qurna-2 and Block 10.

Al-Luaibi said that Iraq has agreed to extend the contract territory at Block 10 located on the Eridu field for Lukoil.

“We’ve mentioned all issues with Lukoil which have not been solved and reached good results. Some of the issues that we had were solved, some remain, in particular in the financial and technical issues,” al-Luaibi said. “As for Block 10, we agreed on extension of the contract territory of Block 10.”

He separately said that another Russian company, Gazprom Neft, will produce 150,000 barrels of oil on the Badra field a day from 2018. “We held a discussion of the issue yesterday, and they plan to reach a level of 150,000 barrels a day next year.”

An earlier reserve estimate of the field amounted to 115,000 barrels daily and it was to be attained after 2017 to remain for seven years.

The official said that Iraq will support a possible decision by participants of the OPEC plus nonmember oil output reduction agreement to prolong it. “If this decision is made, Iraq will be the first country to stick to this decision.”

OPEC states agreed to reduce their oil production by 1.2 million barrels daily to 32.5 million barrels in November 2016. Russia joined the agreement in December with a promise to cut output by 300,000 barrels daily compared with the level of October 2016. The agreement was concluded for January–June and was prolonged for nine more months in May. Another extension of the deal is not ruled out, OPEC said in a statement on August 24.

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