Lukoil wins Iraq oilfield contract

Russian firm and its Norwegian partner win auction to drill untapped reserves.

    Iraq is looking to boost it oil output in order
    to kickstart its economy [AFP]

    Split of revenues

    Lukoil and StatoilHydro, the Russian company's Norwegian partner in the West Qurna-2 project, requested $1.15 for each barrel extracted from the oil field.

    Lukoil will take 85 per cent of the revenue from extraction, while StatoilHydro will take the remainder. The companies expect to extract 1.8 million barrels a day from the field.

    West Qurna-2, which has known reserves of 12.9 billion barrels, lies to the west of the Majnoon field, which was auctioned on Friday to Shell, an Anglo-Dutch company, and Petronas, a Malaysian firm.

    Shell and Petronas will get $1.39 for each barrel of oil they extract from Majnoon, which has proven reserves of 12.6 billion barrels.

    CNPC, a Chinese firm, led a group comprising Petronas and France's Total on Friday to get access to the southern Halfaya oil field.

    Each company in that consortium will receive $1.40 per barrel, based on projected production of 535,000 bpd.

    Output target

    Contracts were also agreed for access to the Garraf, Najmah, Qaiyarah and Badra fields.

    Sonangol, an Angolan firm, will work in the Qaiyarah and Najmah oil field, which lie in the northern province of Nineveh.

    A joint bid from Petronas and Japex, a Japanese company, took the Garraf  field in south Iraq, while a consortium led by Russia’s Gazprom was awarded a contract to work on Badra, near the Iranian border.

    Oil firms avoided bidding for fields in the most dangerous areas of the country, while companies that did not offer enough value for money were refused the chance to work the oil fields.

    The auctions, the second to be held since June, come as Baghdad looks to kickstart its economy and generate income for the government.

    Iraq hopes to raise oil production to seven million bpd within six years, from the current output of 2.5 million bpd.

    At 115 billion barrels, Iraq has the world's third-largest proven oil reserves, behind only Saudi Arabia and Iran. Oil sales provide 85 per cent of government revenues.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    Learn what India's parties' symbols mean by drawing them

    Learn what India's parties' symbols mean by drawing them

    More than 2,300 political parties have registered for the largest electoral exercise in the world.

    Visualising every Saudi coalition air raid on Yemen

    Visualising every Saudi coalition air raid on Yemen

    Since March 2015, Saudi Arabia and a coalition of Arab states have launched more than 19,278 air raids across Yemen.

    Why did Bush go to war in Iraq?

    Why did Bush go to war in Iraq?

    No, it wasn't because of WMDs, democracy or Iraqi oil. The real reason is much more sinister than that.