Russias Lukoil has started commercial production from the West Qurna-2 oil field in the south of Iraq.
In a ceremony attended by Iraqs Deputy Prime Minister for Energy Affairs Hussain al-Shahristani and Russias Deputy Prime Minister Arkady Dvorkovich, spigots were officially opened on 28 March, allowing 120,000 barrels a day (b/d) of crude to flow into storage facilities and international markets.
Under the terms of its service contract with the Oil Ministry, Lukoil must now maintain this level for the next 90 days to begin receiving a return on its investment, according to a 29 March company statement.
The firm plans to ramp up production to 400,000 b/d before the end of 2014. Lukoil became the first international oil company (IOC) in Iraq to renegotiate the terms of its technical services agreement in January 2013, reducing the plateau target to 1.2 million b/d from the original 1.8 million b/d.
The West Qurna-2 field is being developed over three phases. The first phase, which has now been launched, is known as Mishrif Early Oil, and has a target production level of up to 400,000 b/d.
The main production facilities for this phase have been completed since April 2012. These include a 400,000-b/d central processing facility (CPF), 48 development wells, 5 well pads, a 126MW gas turbine power plant, river water intake facilities, and a crude oil export pipeline to the 198,000-cubic-metre Tuba tank farm.
Phase two of the Mishrif full-field development will take production up to 550,000 b/d. Finally, phase three covers the Yamama formation development, which will raise production to 1.2 million b/d. The production plateau will then be maintained for 19.5 years.
Earlier in March, Lukoil awarded Australias WorleyParsons a major design contract for front-end engineering and design (feed) work for the development of the Yamama reservoir.