Russia’s LUKoil inks oil search deal with Iraq

PanARMENIAN.Net - the right to explore the field, 120 kilometers west of Basra, in late May. LUKoil holds 60 percent of the field and Japan's INPEX owns 40 percent.

Under the terms of the Iraqi government tender, minimum outlays on geological prospecting for the field should be no less than $100 million. If promising oil reserves are found, investment could reach $300 million.

Block 10 covers an area of 5,500 square kilometers in the oil-rich region, where international oil majors are developing giant oil fields, including Rumaila, West Qurna-1, and the West Qurna-2 fields.

LUKoil foreign projects head Andrei Kuzyayev said in June that Block 10 was one of the most attractive, as discovery of large oil reserves there was highly probable.

LUKoil is also developing Iraq's giant West Qurna-2 field, one of the world's largest oilfields, with recoverable reserves estimated at 12.9 billion barrels of oil. LUKoil says it plans to launch production at West Qurna-2 in early 2014.

LUKoil participated in the first stage of West Qurna-1 development project and signed a contract with the former Saddam Hussein regime to develop the second stage, but the deal was frozen in 2002. The Iraqi government and LUKoil agreed in 2008 to renew cooperation.

The list of Russian energy firms operating in Iraq also includes Gazprom Neft, the oil arm of Russian energy giant Gazprom, which operates the Badra deposit with a 30-percent stake in the project. Badra's reserves are estimated at about three billion barrels of oil. Production is scheduled to start in 2013.