|LUKOIL MID-EAST LIMITED||Production of oil, gas and condensate|
|LUKOIL Overseas Iraq Exploration B.V.||Geological exploration|
|LUKOIL International Services B.V.||Service|
WEST QURNA-2 FIELD
The West Qurna-2 field is located in southern Iraq, 65 kilometers north-west of Basra, a major seaport. The service contract for West Qurna-2 development and production was signed in January and came into effect in February 2010. West Qurna-2 is one of the largest fields globally. PJSC LUKOIL holds a 75% interest in the project.
In March 2014, commercial oil production commenced at the field. For this purpose the field's main production facilities were constructed in a record-short time of 27 months. Currently, the commissioned facility enables the production of 450,000 bbl per day. West Qurna-2 is a major investment project carried out in Iraq by a private company, in which maximum production growth was achieved from a single field.
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BLOCK 10 PROJECT
In May 2012, following the completion of the forth 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 ths.
sq. km 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. Between 2013 and 2014, the block was cleared of mines and between April 2014-February 2015, 2 ths. km of the block were covered by 2D seismic surveys. The seismic surveys helped determine the promising targets for exploration drilling activities.
The consortium of PJSC LUKOIL and Statoil (Norway) was declared the winning bidder and was awarded the West Qurna-2 development rights.
A Service contract was signed for the development and production at the West Qurna-2 field.
A Service contract for the development and production at West Qurna-2 took effect following its ratification by the Iraqi Council of Ministers.
A turnkey contract was signed with Baker Hughes for the production drilling and development of 23 wells at West Qurna-2.
The Final Investment Decision (FDI) was made for the Early Mishrif Oil project. The First stage of the West Qurna-2 development actually commenced.
LUKOIL signed a number of contracts, as part of the West Qurna-2 development and production project, with Samsung Engineering (South Korea) – for the construction of an oil treatment unit and gathering system (OTU); with ENKA Insaat (Turkey) – for the construction of a gas turbine power plant (GTPP); and with the consortium of Entrepose Projets/Rosco (France-Jordan) – for the expansion of the Tuba tank battery.
A first production drilling and ground-breaking ceremony for the oil treatment unit (OTU) was held at the West Qurna-2 field.
Statoil assigned its 18.75% interest in the West Qurna-2 development and production consortium to PJSC LUKOIL. LUKOIL’s share in the project went up to 75%.
The parties made a supplementary agreement to the service contract for the development and production at West Qurna-2. The project’s oil production targets dropped from 1.8 mln to 1.2 mln bbl./day, while the periods of target production levels maintenance was prolonged from 13 to 19.5 years and the overall contract term was extended from 20 to 25 years.
The Company produced its first oil at the West Qurna-2 field.
LUKOIL started 2D seismic surveys at Block 10 located in southern Iraq.
LUKOIL awarded the right to recover costs and earn compensation under the West Qurna-2 project.
The first-ever tanker carrying cost recovery oil intended to make up for the costs sustained by PJSC LUKOIL as part of the West Qurna-2 project left the sea port of Basra.
2D seismic surveys of Block 10 in southern Iraq were fully completed by LUKOIL six months ahead of schedule.
LUKOIL has invested a great deal of effort to provide better living standards for local residents in the areas of its operations in Iraq. In the past few years, LUKOIL created thousands of jobs, and hundreds of personnel received training at the training center for the Iraqis employed at West Qurna-2. The social program of LUKOIL, that has been around for some years, is already part of the West Qurna-2 project seeking to improve the physical infrastructure of educational, healthcare and sports institutions. The Company has been very active in providing support to local communities, launching multiple projects to re-equip local schools, purchase computer equipment, arrange for regular supplies of drinking water to schools, build sports facilities and purchase state-of-the art medical equipment for local hospitals.