Russia’s Lukoil has signed a supplement agreement for its development and service contract at the West Qurna phase-2 oil field in the south of Iraq, reducing the field’s target production level and extending the contracts validity.
The Russian firm will now target a production level of 1.2 million barrels a day (b/d), instead of the 1.8 million b/d agreed in 2010 during Iraq’s first second field licensing round, according to a statement from Lukoil.
The new deal marks one of the first of Iraq’s contracts to be successfully renegotiated and officially announced. Other international oil companies working in Iraq are also understood to be in discussions with the Oil Ministry to revise their targets.
Lukoil has also agreed to extend the length of time it has to maintain the target production level from 13 to 19.5 years. The West Qurna-2 contract will last 25 years, five years longer than previously agreed.
The changes will now be taken into account in the preparation of a final development plan for the field, which will be presented to the Oil Ministry by April this year.
The agreement, signed by Vagit Alekperov, president of Lukoil Overseas and representatives from state-owned North Oil Company and South Oil Company, also sees the official transfer of an 18.75 per cent share in the project to Lukoil, which was previously held by Norway’s Statoil before the company withdrew in March 2012.