Iraq's West Qurna II to Come Onstream in 2013

Lukoil has said it remains on course to start production at its giant southern Iraqi oil field West Qurna 2 in late 2013, more than a year later than originally planned. The Russian producer, like other foreign oil companies, has faced problems obtaining government approval for contractors at its oil projects.

The company had said in September it hoped to have all contractors approved by October. Chief executive Vagit Alekperov told journalists in Moscow on Friday that the papers would now be approved next month.

"The Iraqi Oil Minister has confirmed us that in December all issues regarding to approval of our tender proposals will be concluded," Alekperov said, Dow Jones reported. Lukoil and Norway's Statoil were awarded a 20-year service contract for West Qurna Phase 2 in Iraq's second licensing round held in December 2009.

The companies promised to get the southern field pumping at a rate of 1.8 million bpd ay for payment of US$1.15 a barrel with first oil planned for August 2012, but the project has been pushed back partly because the Iraqi government has been slow to approve contractors. "We expect to start production in late 2013," Alekperov said. He reiterated that Lukoil has started exploration drilling at the field.

Contractors which have been picked for crude oil processing facilities, power station, export pipeline and storage tanks have been approved by Iraq's South Oil Company but are now pending approval from the Oil Ministry, Alekperov added.

As reported by Upstream last month, Lukoil and partners were poised to hand out a feast of contracts to international engineering and construction companies as it strove to move full speed ahead with the development. - Upstream