Basra — Lukoil's massive new discovery in southern Iraq -- part of the Russian firm's sizable growth plans in the Middle Eastern country -- will start production in 2021, the head of Iraq's regional state-run oil company said.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
Aggressive exploration continues at Block 10, Dhi Qar Oil Company Director General Ali Warid said in a statement emailed to S&P Global Platts, following Lukoil's announcement earlier this year that "recoverable reserves in excess of 2.5 billion barrels of crude" from the Eridu-1 well was the biggest find in Iraq in 20 years.
"The Chinese Bohai company has started to drill the 4th well in the 10th exploration block," Warid said. "The drilling work comes along the same time of the 3D scan conducted by the (Iraqi state-run) Oil Exploration Company."
He added: "I predict that the actual production of the field will start in 2021 according to the plans made by Lukoil in coordination with the Oil Ministry."
Lukoil won Block 10 in a 2012 bidding round. It's located mostly in Dhi Qar province, west of Lukoil's 400,000 b/d West Qurna-2 project, located in the Iraqi oil capital of Basra province.
Yaroslav Okulov, the chief financial officer of Lukoil Mid East, said at a conference in Istanbul on Tuesday that Eridu was a "very promising discovery" and appraisal work was ongoing.
"I believe that once we finish the appraisal, reserves will come to life, so it will bring additional capacity for oil production," he said.
Lukoil is a significant foreign investor in Iraq's oil sector. The West Qurna-2 field, signed in 2010, has reached 400,000 b/d capacity, with an additional 50,000 b/d to 100,000 b/d expected by the end of 2019.
Ihsan Ismaael, the director general of the state-run Basra Oil Company, said at the Istanbul conference that the 800,000 b/d production plateau target might be increased by "20% because there are new opportunities to develop."
Okulov said the next phase of the project will be to drill additional wells for a water injection system to boost reservoir pressure, and "expand capacity of the oil treatment and water treatment facilities."
He said production from the Yamama reservoir at West Qurna-2 will bring another 30,000 b/d online in two years. "But basically, this is a pilot project, we aim to understand the potential of Yamama."
-- Staff Reports, firstname.lastname@example.org
-- Edited by Pankti Mehta, email@example.com