Russia’s Lukoil blamed for delay in bringing giant Iraqi oil field on stream on time

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By Shaymaa Adel

Azzaman, December 13, 2013

Baghdad has expressed its displeasure and anger at Lukoil’s failure to start pumping oil from a giant field it is developing in southern Iraq on time.

Lukoil, which won a contract to develop West Quran 2, was supposed to start commercial production of crude from the field by the end of 2013.

However, the company is reported to have put off production in commercial quantities to 2014.

A delegation led by Lukoil’s President Vagit Alekperov is currently in Baghdad for talks with Iraqi authorities who are reported to be unhappy with the company’s performance.

Alekperov had a meeting with Deputy Prime Minister Husain al-Shahristani, in charge of Iraq’s energy sector, on Friday.

Local newspapers said that Shahristani urged Alekperov “to speed up work on Quran 2” and asked him for a briefing on the current pace of development.

“Shahristani asked Alekperov to exert more efforts to develop the field as quickly as possible,” Azzaman said.

Lukoil has a 20-year contract to develop West Quran 2 in the Province of Basra. The field holds proven reserves estimated at 13 billion barrels of oil.

Since the signing of the contract in 2010, Lukoil has been revising its schedule and estimates of production.

Initially it said it would pump 1.8 million barrels a day by 2015 but it has scaled back the estimate to 1.2 million and that it would churn out 500,000 barrels by end of 2013.

The delay in honoring a pledge to start commercial production by now has cast doubt on the pace of development and its schedules.

Shahristani admitted during his meeting with Alekperov that foreign majors have been facing problems as they strive to boost Iraqi oil output and urged them “to expedite the development of (their) fields.”