Statoil, Lukoil sign development agreement for West Qurna 2 oil field

In Baghdad yesterday, Helge Lund, the president and CEO of Statoil, and Vagit Alekperov, the president of Lukoil, signed the development and production service contract for the West Qurna 2 oil field.

In Iraq’s second licensing round last December, Statoil and Lukoil are the successful bidders for the development and production contract on the West Qurna 2 oil field; a contract now ratified by the Iraqi Cabinet of Ministers.

Through extensive drilling and development, Statoil and Lukoil plan to bring production from the West Qurna 2 oil field to 1.8 million barrels of oil per day at a remuneration fee of $1.15 a barrel.

Development of the West Qurna 2 oil field will require drilling more than 500 wells, and additional seismic will be acquired on the field. With development slated to begin in 2011, first production from the West Qurna 2 oil field is expected to be reached by the close of 2012. Peak production should be reached by 2017 and held for 13 years.

The West Qurna 2 oil field is located in southern Iraq, 65 kilometers northwest of Basra. The oil field holds some 13 billion barrels of recoverable reserves.

The West Qurna 2 consortium includes Lukoil with 56.25 percent, Statoil with 18.75 percent and Iraq's North Oil Company with 25 percent interest.

Last week, a consortium led by ExxonMobil signed the redevelopment contract for the West Qurna 1 oil field nearby.

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