MOSCOW, December 26 (RIA Novosti) – Russia’s largest privately-owned oil company LUKoil has cut its oil output plan for the West Qurna-2 oilfield in Iraq by 30 percent, LUKoil Overseas confirmed on Wednesday.
The plan was cut from 1.8 million bbl/d to 1.2 million bbl/d in line with an Iraqi request, LUKoil Overseas head Andrei Kuzyayev said.
“Having analyzed the situation over the past three years, the Iraqi side concluded that they do not need peak production. This leads to the creation of excessive infrastructure and, further on, when production declines, could create an unstable macroeconomic situation,” he said.
“This is why the Iraqi leadership decided to cap oil production at 9 million barrels [a day] instead of 12 million barrels in the country as a whole,” Kuzyayev told Russia 24 TV channel.
The International Energy Agency reported in October that Iraq's oil production could reach 6.1 million barrels a day by 2020, and 8.3 million by 2035, compared with just over 3 million now.
Kuzyayev said Iraq’s negotiations with OPEC were tense, because an extra 8-9 million barrels a day could destabilize global markets and cause world oil prices to plunge.
“As for West Qurna-2, we expect our planned level of 1.8 million barrels to be 30 percent lower, under an agreement with the Iraqis, somewhere in the region of 1.2 million barrels. Instead, we’ll get a substantial extension of this production level from the previously planned 12-13 years to 19 years.”
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.