Lukoil looks to China for partner on Iraq oil field

oilrig1Lukoil expects to boost its oil output 1.5 per cent this year as its starts production at Iraq’s West Qurna-2 field

The Moscow-based crude producer will seek to extend its contract to operate the Iraqi field by five years after the Middle East state asked Lukoil to reduce peak output levels at its operations in the counntry due to infrastructure issues and reduction in planned output, Vagit Alekperov, CEO of Lukoil, said in Novy Urengoi.

The firm wants a Chinese firm to succeed Norwegian group Statoil.

“We are less interested in money than in long-term marketing of our output,” Alekperov stated.

“For us ... the most appropriate partners are from China, where there is stable growth in oil consumption, and West Qurna volumes are very large, so they need to be placed efficiently,” he added.

Last year, Statoil agreed to sell its 18.75 per cent stake in West Qurna Phase-2, making Lukoil the sole foreign partner in the oil field with a 75 per cent holding.

Iraq’s oil ministry told Lukoil it favoured a Russian-Chinese pairing to develop West Qurna Phase 1, which became available in November last year.

Alekperov was speaking in the northern gas industry hub of Novy Urengoi, where industry leaders were meeting Prime Minister Dmitry Medvedev.

“There will be slight growth in 2013 with larger gains in 2014 to 2016 as oil projects start,” Alekperov said.

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