West Qurna Field (Phase 2)

West Qurna-2 is the second portion of the 'super giant' West Qurna field made available for licensing. The field was discovered by Soviet geologists in 1973 and as of 2012 was the second biggest undeveloped field in the world with around 13 billion barrels of recoverable oil reserves.

Contract Negotiations
Phase 2 of the West Qurna field was put up for bidding at Irsq's second licensing round of 2009. The field was among the first two fields offered on the second bidding day, which according to a leaked US diplomatic cable attracted 'stunningly low prices'. The remuneration fee accepted for the winning bid by a Lukoil-led consortium was $1.15 per barrel and the agreed target production plateau was 1.8 million barrels per day (bpd). The other consortia which bid for the field were led by Malaysian Petronas and French Total, proposing remuneration fees of $1.25 and £1.72 respectively.

The remuneration fee would be payable once the contract area achieved a production level of 120,000 bpd. The plateau production target was to be maintained for 13 years and a signature bonus of $150 million would also be payable. Under the terms of the contract, Russian Lukoil would lead the consortium with a 56.25% stake, Statoil would hold a an 18.75% stake and Iraqi state-owned South Oil Company (SOC) would hold 25%.

Production and Export
As of October 2012 production had not yet begun at West Qurna-2. However Andrei Kuzyaev, president of Lukoil Overseas, said the company planned to start production in late 2013 or early 2014 at a level of 150,000 bpd. They hoped to see production to reach 400-500,000 bpd by the end of 2014. Lukoil CEO Vagit Alekperov also separately told local press that the company expects output of 1.7 million bpd by 2017.

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