LUKOIL Group is dedicated to the implementation of oil and gas exploration and production projects in the Middle East and Asia, West Africa and Europe, and in the promising regions of North, Central and South America.
Shah-DenizShah-Deniz gas-condensate field with an area of 860 km2 is located in the Azerbaijani sector of the Caspian Sea, 100 km southeast of Baku at depths of up to 700 m. Its reserves total 1.2 trn m3 of gas and 240 m t of gas condensate.
The 40-year Production Sharing Agreement for the project providing for a possible 12-year extension took effect in 1996, while the discovery of commercial reserves occurred in 2001, and the first gas was produced in 2006.
The parties to the project's operating consortium are as follows: BP (operator) – 28.83%, TPAO – 19%, Petronas – 15.5%, SOCAR – 10%, LUKOIL– 10%, NICO – 10%, and SGC – 6.67%.
The production operations currently underway are part of Stage 1 of the field development. Recovered gas is delivered to buyers via the South-Caucasus pipeline Baku - Tbilisi - Erzurum, while recovered liquid hydrocarbons are delivered via the Baku-Tbilisi-Ceyhan oil pipeline. In 2016, LUKOIL's production share totaled 0.9 bn m3 of commercial gas and 0.2 m t of gas condensate.
Stage 2 of Shah-Deniz development commenced in December 2013. The project will provide for an additional production increment of 16 bn m3 of gas, 10 bn m3 of which are expected to be supplied to Europe, while 6 bn m3 will be exported to Turkey.
In August 2015, LUKOIL Overseas Shah-Deniz Ltd. (a wholly owned subsidiary of PJSC LUKOIL) signed an agreement in Baku with a bank consortium to obtain a $1 billion loan for a term of 12 years to implement Stage 2.
- LUKOIL in the Republic of Azerbaijan
On December 12, 2009, the consortium of PJSC LUKOIL and the Norwegian Statoil was awarded a contract for the development of West Qurna-2, one of the world's largest fields, with recoverable oil reserves totaling around 13 bn bbl of oil in two major formations, Mishrif and Yamama.
West Qurna-2 is a major investment project carried out in Iraq by a private company, as part of which maximum production growth has been achieved from a single field. LUKOIL's production share came to 5 m t in 2016.
- West Qurna-2
Block 10 ProjectIn May 2012, following completion of the 4th licensing round, LUKOIL in conjunction with INPEX CORPORATION (Japan) was awarded the right to conduct exploration and subsequent development of Block 10.
The 5.5 thousand km2 block is located in Di-Kar and Mutanna provinces, 120 km west of Basra, in the proximity of such major Iraqi oil fields as Rumaila and West Qurna. Production shares are divided as follows: LUKOIL - 60% (operator), INPEX CORPORATION - 40%.
The contract on Block-10 was signed in November, and came into force in December 2012. Between 2013 and 2014, the block had been demined and between April 2014 and February 2015, two thousand linear kilometers of the block were covered by 2D seismic surveys. The seismic surveys helped determine the promising targets for exploration drilling activities.
In 2017, LUKOIL and INPEX successfully tested the first Eridu 1 exploration well at Block 10. Testing of the Mishrif horizon revealed low-sulphur oil influx rate of over 1,000 cubic meters per day. It confirmed the geologists' prediction of a major hydrocarbon deposit at Block 10.
- LUKOIL in the Republic of Iraq
Karachaganak ProjectThe Karachaganak field is located in the West-Kazakhstan region, 140 km away from the city of Uralsk. The field reserves total 1.2 bn t of oil and condensate and over 1.35 trn m3 of gas. It is one of the world's largest oil and gas condensate fields.
LUKOIL joined the project in 1997. The operator is Karachaganak Petroleum Operating B.V. Parties to the project include: BG — 29.25% (co-operator), ENI — 29.25% (co-operator), Chevron — 18%, LUKOIL — 13.5% and KazMunaiGaz — 10%. The total number of staff is around 4.5 thousand people. The field is developed in accordance with the Final Production Sharing Agreement (FPSA) signed in November 1997 effective for a period of 40 years.
Today, Karachaganak produces almost 45% of all gas and 16% of liquid hydrocarbons in Kazakhstan. In 2016, LUKOIL's production share totaled 1.4 mln t of liquid hydrocarbons and 1.1 bn m3 of commercial gas.
Further development of the field is underway with a focus on production growth.
Kumkol ProjectThe Kumkol field is located in the Kyzylorda region in Kazakhstan, 200 km away from the city of Kyzylorda. It is after joining the development project for this field back in 1995 that the Company began its operations in Kazakhstan.
The project's operator is Turgai Petroleum. Parties to the project include: LUKOIL — 50%, CNPC — 50%. The field is developed on the basis of a subsoil use contract signed in April 1996.
The contract term is 25 years. The total number of staff is 675 people. In 2016, LUKOIL's production share totaled 0.3 mln t of oil and 26 mln m3 of commercial gas.
The Tengiz field (one of the world's largest fields) and Korolevskoye field that are part of the Tengiz project are located in the Atyrau region in Kazakhstan, 150 km away from the city of Atyrau. The recoverable oil reserves of the Tengiz and Korolevskoye fields are between 750 mln and 1.1 bn t, the total explored reserves of the Tengiz reservoir comprise 3 bn t, and those of the Korolevskoye field come to 190 mln t.
LUKOIL joined the project in December 1997. The project's operator is Tengizchevroil LLP. Parties to the project include: Chevron — 50%, ExxonMobil — 25%, KazMunaiGaz — 20%, LUKOIL (Lukarco) — 5%.
The fields are developed under the agreement made in April 1993 effective for a period of 40 years. The total number of Tengizchevroil staff is around 3.5 thousand people.
In 2016, LUKOIL's share of production at the Tengiz field came to over 1.4 mln t of oil and 0.5 bn m3 of gas. Today, all the project's crude oil is shipped via the Caspian Pipeline Consortium (CPC).
A project for the expansion of the field to increase oil production is being prepared along with the related project aimed to control the well-head pressure to maintain the current operating rate.
Caspian Pipeline Consortium
The Caspian Pipeline Consortium (CPC) is the only privately owned mainland pipeline in Russia and Kazakhstan. The pipeline runs from the Tengiz field to Novorossiysk (Russia), crossing the Atyrau region in Kazakhstan and four constituent entities of the Russian Federation: the Astrakhan region, Republic of Kalmykia, Stavropol territory and Krasnodar territory.
As of late 2016, parties to the project include: OJSC Transneft – 31% (managing the interest held by the Russian Federation – 24% along with CPC Company – 7%); Republic of Kazakhstan – 20.75% (represented by KazMunaiGaz – 19%, and Kazakhstan Pipeline Ventures LLC – 1.75%), as well as Chevron – 15%, LUKOIL – 12.5%, ExxonMobil – 7.5%, JV Rosneft-Shell – 7.5%, BG – 2%, ENI – 2% and Oryx Caspian Pipeline – 1.75%.
The project agreement was signed in December 1996, while the pipeline was commissioned in October 2001. The pipeline is over 1.5 thousand km long and 1,020 mm in diameter. In 2011, a construction project was launched to widen the CPC and bring its capacity to 67 mln t per day.
- LUKOIL in the Republic of Kazakhstan
A Production Sharing Agreement (PSA) for the Kandym-Khauzak-Shady project was signed in June 2004, and LUKOIL Uzbekistan Operating Company was founded in July 2004. The 35-year PSA came into force in November 2004, the field work began in the same year. In 2015, the PSA for the Kandym-Khauzak-Shady project was prolonged to 2046.
The first production unit at the Khauzak-Shady block in Bukhara region of Uzbekistan was commissioned in November 2007. Exactly one year later the field reached the designed gas production level. In late 2011 gas production started in the West Shady Block. At the end of 2014, a booster centrifugal compressor station, a high tech unit and the first-of-its-kind production facility in Uzbekistan was commissioned at the Khauzak block. The launch of the station and the upgrade of the preliminary gas processing terminal boosted gas production by 20 percent.
The development of six separate Kandym gas condensate fields is another important step in the implementation of the production sharing agreement (PSA) for the Kandym-Khauzak-Shady project.
In February 2015, LUKOIL and a consortium of contractors led by Hyundai Engineering Co. (South Korea) signed a contract in Tashkent to supply equipment, construct a gas processing plant and develop infrastructure of the Kandym group of fields.
In May 2015, two preliminary gas processing terminals at the Kuvachi-Alat field and the Northern Shady sector of the Dengizkul field in the Bukhara region were commissioned, as part of the Early Kandym Gas project. The annual cumulative capacity rate is 2.1 bn m3 of gas.
In September 2015, the Government of the Republic of Uzbekistan issued a resolution approving the feasibility report of the Kandym gas processing plant and its further implementation. With a capacity of 8 bn m3 of gas per year, the plant can process hydrogen sulfide-containing gas to produce purified natural gas, stable gas condensate and solid sulfur.
In 2016, the plant construction began, and the project is proceeding on schedule.
South-Western Gissar Project
LUKOIL joined the South-West Gissar project in March of 2008. The contract area in the Kashkadarya region in Uzbekistan covers seven fields. The project PSA for a period of 36 years took effect in April 2007. 3D and 2D seismic surveys were performed in 2010 to reveal several prospects that lead to the discovery of 3 small fields. The predominantly oil-producing fields of Okkul and Koshkuduk saw integrated facilities development including the drilling of new production wells, and the construction of external power supply lines, an oil gathering and treatment system, a rotation camp and roads. In late 2011 early gas was produced at the Dzharkuduk - Yangi Kyzylca field, and in 2012 the field reached its target production rate. In the spring of 2013, the Gissar full development project moved on to the Execution Phase. In October 2014, LUOC and ERIELL Corporation Sro. of Czech Republic signed a turnkey contract for design, procurement, and construction of surface facilities for the gas and condensate fields of Adamtash, Gumbulak, and Dzhakurduk-Yangi Kyzylcha. The main construction facilities include Dzhakurduk gas treatment plant, with the annual rated capacity of 4.4 bn m3, a 1.8 bn m3 per year Adamtash preliminary gas processing terminal, a well products gathering system, a field support base, a power supply system, utility lines and motor roads.
- South-West Gissar
- LUKOIL in the Republic of Uzbekistan
WEEM Extension Project
In February 2009, LUKOIL joined WEEM Extension project in Egypt (the block is located next to the WEEM block in the northeast). Parties to the project include: LUKOIL- 50% (operator), Tharwa Petroleum - 50%.
Block exploration commitments were performed, which included wildcat drilling and 3D seismic surveying. Pilot operations commenced in 2010, and at that time a 20-year development license was obtained.
The 2016 oil production came to 5 thousand tons (LUKOIL Group's share).
LUKOIL is participant to the Meleiha project in the Western Desert of Egypt, the contract is valid until 2024. Meleiha is one of PJSC LUKOIL's first international production projects. The Company joined it in 1995. Currently, parties to the project include: ENI - 76% (operator), LUKOIL - 24%.
Over the last few years, following intense additional exploration efforts, including 3D seismic surveys and exploratory drilling, several new highly productive fields were discovered within the block – North Nada and Gavaher (2007), Arkadia (2010), Emri Dip (2012), Rosa North (2013), and Meleiha-West (2014).
The 2016 oil production came to 182 thousand tons (LUKOIL Group's share).
LUKOIL is now implementing WEEM (West Esh El-Mallaha) production project in Egypt (the Eastern desert, in the vicinity of Hurghada). Production operations have been conducted at the block since 1998. After joining the project in 2002, LUKOIL has ensured quick incremental development of the fields (more than 12 times vs. the first two years of operations).
In 2004, as part of the WEEM project, a number of infrastructure facilities were constructed, including a tank battery with a total capacity of 9 thousand m3 and a 100 km long export pipeline that connected the block's fields with the oil loading terminals Ras Al-Bihar and Gebel Al-Zeit on the west coast of the Red Sea.
In 2014, two production wells were drilled at the block which helped to secure incremental production.
In 2015, a series of well interventions were completed on the existing well stock, which made it possible to secure cumulative incremental production of 65 tons per day.
The 2016 oil production came to 110 thousand tons (LUKOIL Group's share).
- LUKOIL in the Republic of Egypt
PL 719 Production License
License block PL 719 with a total area of around 600 km2 includes blocks 7321/8 and 7321/9 located in the Fingerdjupe basin in the western part of the Barents Sea. The water depth at the blocks varies from 430 to 490 meters.
Year of joining the project: 2013
Parties to the project include: British Centrica — 50% (operator), LUKOIL — 30%, Norwegian North Energy — 20%.
Processing and interpretation of 3D seismic data, and biostratigraphic surveys were conducted at PL 719 block, the oil and gas bearing system and the faults conductivity were analyzed.
Currently, the Company is expecting a decision on the choice of priority drilling target for a wildcat.
PL 858 Production License
PL 858 license block with a total area of 1,432 km2 includes blocks 7234/3,6 and 7235/1,2,3,4,5 located in the eastern part of the Norway sector of the Barents Sea (Fedynskiy uplift). The average sea depth is 230 meters.
Year of joining the project: 2017
Parties to the project include: Aker BP — 40% (operator), LUKOIL — 20%, Statoil Petroleum — 20%, Petoro — 20%.
The 2017 exploration works included: interpretation of 3D seismic data, choice of target objects for drilling, approval of the 7234/6 exploration well location, ecological data research and engineering surveys of the seabed.
- LUKOIL in the Kingdom of Norway
In June 2014, LUKOIL joined the deep-water offshore project in the Etinde block on the Cameroon shelf in West Africa (the deal was closed in March 2015).
The block with an area of 460 km2 is located in the Cameroonian waters of the Gulf of Guinea, 20 km offshore right near the border with Equatorial Guinea. Water depth at the block ranges between 75 and 10 meters.
It is developed on the basis of a product-sharing agreement (PSA) signed in December 2008. In July 2014, a 20-year license was obtained for the development of the Etinde block. Parties to the project include: New Age Ltd. — 30% (operator), LUKOIL — 30%, EurOil Ltd. (Bowleven) — 20%, and Societe Nationale des Hydrocarbures, a Cameroonian National Company — 20%.
Previously, thirteen out of fifteen exploration and appraisal wells drilled at the block yielded positive results. In 2015, two more appraisal wells were drilled. Currently, the Company is conducting design and engineering activities at the site and drawing up a development program for the newly discovered gas fields.
- LUKOIL in the Republic of Cameroon
Trident Block Project
The Trident block (EX-30) is located in the Romanian sector of the Black Sea at the depths of 90 to 1,200 meters. Distance from the shore: 60 to 120 km, the closest major port is Constanta.
Production shares are divided as follows: LUKOIL — 72% (operator), American PanAtlantic — 18%, Romgaz, a Romanian National Gas Company, — 10%.
In February 2011, following the bidding process completed in July 2010, the Consortium to which PJSC LUKOIL is a party signed a concession contract with the Romanian National Agency for Mineral Resources for exploration and development of the block. LUKOIL Overseas opened an office in Bucharest in May 2011 to manage the project. The agreements were ratified by the Romanian Government in October 2011.
In 2012, 3D seismic surveys were conducted at the block across the area of 2 thousand km2. From November 2014 till October 2015, jointly with its project partners, LUKOIL implemented a drilling program for wildcats.
In October 2015, following the drilling of Lira-1X wildcat at Lira offshore structure located at the Trident block, a major gas field was discovered. The well was mothballed, and tests are to be carried out therewith to estimate the discovery potential. Based on preliminary analysis of the drilling and geophysical survey data, Lira-1X delivered a productive interval with an effective gas-saturated thickness of 46 meters. According to seismic data, the area of the gas field can reach up to 39 km2, reserves can come to 30 bn m3 of gas, which needs to be confirmed during appraisal drilling.
Success of the Lira-1X well helped mitigate the risks inherent to further exploration of a number of promising exploration targets with significant resource potential, both located in the vicinity of Lira and at other block sites.
- LUKOIL in Romania
Block OML-140 Project
In September 2014, LUKOIL joined the offshore deepwater project at OML-140 block on the Nigerian shelf in West Africa (the accession was closed in September 2015). The block with an area of more than 1.2 thousand km2 is located in the Nigerian waters of the Gulf of Guinea, 135 km away from the coast. Water depth at the block ranges from 1.2 to 2 thousand meters.
In June 2009, a 20-year license was granted for the development of the block. Chevron (Star Ultra Deep Petroleum) acts as a project operator. Parties to the project include: NNPC, a Nigerian company, — 30%, Star Ultra Deep Petroleum (STAR) — 27%, ONG — 25%, LUKOIL — 18%.
The Nsiko field was discovered within the block as well as a number of promising structures. Currently, an exploratory drilling program is underway to update the geological models and collect more resources data.
- LUKOIL in the Federal Republic of Nigeria
Tano Block Project
In March 2014, LUKOIL joined the offshore deepwater project at the Tano block (Deepwater Tano/Cape Three Points) on the shelf of Ghana in West Africa (the deal was closed in October 2015). The Tano block's area is a little over 2 thousand km2. It is located in the western part of Ghana's water area in the Gulf of Guinea, 80 km offshore in the vicinity of the Cameroonian coast. Water depth at the block ranges from 1.6 to 3 thousand meters.
Seven hydrocarbon fields were discovered within the block: five oil fields and two gas fields.
- LUKOIL in the Republic of Ghana
Amatitlan Block Project
The Amatitlan block occupies the area of 230 km2 and is located 68 km away from the city of Poza Rica, Veracruz state, Mexico. LUKOIL joined the project in July 2015. Petrolera de Amatitlán SAPI de CV (PdA) acts as a project operator. The Company's share is 50 percent.
The project is implemented in accordance with the service contract for hydrocarbon production. The produced hydrocarbons are the property of PEMEX. The oil produced here is shipped by motor trucks to the Soledad gathering system (30 km away from the Amatitlan block). Operator's hydrocarbon production services are provided on a cost reimbursement basis.
At the same time, interpretation of 3D seismic survey findings, well logging data, and assessment of the resource base helped determine the location of three appraisal wells.
- LUKOIL in the United Mexican States