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West Qurna-2

West
Qurna-2
Implementing
a
mega
project.

West Qurna-2 field is located in the southern part of Iraq, 65 kilometers north-west of Basra, a major seaport city, and is one of the world's largest fields. The field's initial recoverable reserves come to around 14 billion barrels. More than 90% of the reserves are concentrated in Mishrif and Yamama accumulations.

On December 12, 2009 the consortium of PJSC LUKOIL and Statoil, a Norwegian company, was awarded a contract for the development of West Qurna-2 field, one of the world's largest fields. On January 31, 2010, a services contract was signed for the development and production at West Qurna-2. The contract was ratified by the Cabinet of Ministers of the Republic of Iraq.

A supplement agreement to the contract was signed in January 2013 that outlined the target contractual production (1.2 million barrels of oil per day) for a the target production period of 19.5 years, and a 25-year extension of the contract term.

On March 29, 2014, commercial oil production was commenced at the field.

LUKOIL (interest — 75%).

North Oil Company (NOC), a state-owned company being a part of the Iraqi Oil Ministry. NOC with a 25% interest is involved in the project jointly with the LUKOIL Group under the contractual terms as one of the project contractors. NOC does not incur any costs receiving only its share (25%) in the remuneration.

South Oil Company (SOC) represents the Iraqi Republic in the project and distribute the project oil.

In 2019, LUKOIL commenced drilling of new production wells as part of the second development phase. The Сompany concluded contracts to drill 57 production wells, including 54 wells at Mishrif formation and 3 wells at Yamama formation. The drilling campaign will ramp up production at West Qurna-2 from the current level of 400 thousand barrels per day to 480 thousand barrels per day in 2020.

  • LUKOIL receives the compensation oil as sales proceeds. It is a share in the produced oil based on its price calculated in relation to the global market prices.

  • The LUKOIL Group’s proceeds are divided into two parts – as compensation of costs to the extent incurred, and as remuneration.

  • LUKOIL provides funding for all the project costs except for the remuneration tax payable by the parties to the project on their own for their share of remuneration.

  • Following the compensation of historical losses LUKOIL will obtain compensation of all the costs as a share in oil production.

  • In addition to the compensation of its costs, LUKOIL receives remuneration in proportion to its interest (75%) of USD 1.15 payable to project parties for each barrel of oil and pays profit tax.

Press releases