Russia's largest private oil firm LUKoil started production drilling and construction of an oil processing unit on the giant West Qurna-2 oilfield in Iraq on Wednesday, the company said in a statement.
"Upon reaching the production volume of 150,000 barrels per day, LUKoil will receive the right to reimburse expenses and receive remuneration. After the initial expenses are reimbursed, the project will turn into a self-financing entity," LUKoil President Vagit Alekperov was quoted as saying.
"Total investment in the full-scale project implementation will come to around $25 billion," he added.
In 2009, a consortium comprising LUKoil and Norway's Statoil won a tender to develop West Qurna-2, one of the world's largest oilfields with recoverable reserves estimated at 12.9 billion barrels of oil. LUKoil plans to launch production at the field in early 2014.
The project's core shareholders include LUKoil with 56.25 percent, Iraq's state-owned North Oil Company with 25 percent and Statoil with 18.75 percent. This March Statoil said it would transfer its stake to LUKoil and leave the project. The deal is scheduled to be closed in May 2012.