The Russian oil company Lukoil has started oil production at the West Qurna-2 oil field in Iraq, an Interfax correspondent reported from the first oil ceremony.
Russian President Vladimir Putin said in a greeting message to Iraqi Prime Minister Nuri al-Maliki, which Deputy Prime Minister Arkady Dvorkovich read out at the ceremony, that the launch of this major project by Lukoil is an important step in the development of mutually beneficial practical cooperation between the two countries.
Russian companies "possessing vast experience and cutting-edge technologies of operating hydrocarbon fields are capable of further making a significant contribution to the development of Iraq's rich energy resources," Putin said in his message.
"We reaffirm our willingness to further expand bilateral partnership in various fields and provide assistance to the Iraqi leadership in its efforts toward the country's socioeconomic recovery and ensuring its independence, unity and prosperity. I should point out also that we fully support the Iraqi government's course toward reaching national accord and firmly opposing terrorism and extremism, which are the most serious challenges to security of not only your country but also the entire Middle Eastern region," Putin said.
Lukoil plans to launch the Mishrif Early Oil phase of the project to produce 400,000 barrels of oil per day by the end of 2014. At the present time, the company has drilled 67 development wells and constructed an oil treatment facility (9 threads 57,500 barrels of oil per day each), a 126-MWt gas turbine plant, and a 103-km long export pipeline.
The next phase called Mishrif Full Field Development implies that the production should be increased to 550,000 barrels per day within the next 3-4 years.
After that, Lukoil will switch to developing the Yamama formation (650,000 barrels per day), which should bring the total production at West Qurna-2 to 1.2 million barrels per day (about 70 million tonnes a year). This target should be achieved in 2017, making West Qurna-2 the 4th largest oil and gas project in the world.
The contract is designed for 25 years.
West Qurna-2 contains about 14 billion barrels of recoverable oil reserves, which makes it the second largest virgin oil field in the world. Lukoil holds 75% in the project and the Iraqi government-run company North Oil Company 25%.
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