On December 12, 2009, a consortium of LUKOIL and Norway’s Statoil won a tender for the development of the West Qurna-2 field with recoverable reserves of about 13 billion barrels and original oil in place of 30 to 40 billion barrels.
West Qurna-2 is a field located in southern Iraq, 65 km northwest of the large seaport of Basra. The field was discovered in 1973 and explored (2D seismic and exploratory drilling) in the 70-80s by Soviet exploration and service companies. The contract area is about 300 square kilometers. Currently there is no production on the contract area. Therefore, it is one of the largest undeveloped fields in the world.
The development and production service contract for West Qurna-2 was initialed on December 29, 2009, and signed on January 31, 2010. The contract has been ratified by the Council of Ministers of Iraq Republic.
On January 17, 2013, an additional agreement to the contract was signed, which particularly sets forth the target production rate (1.2 MMB of oil per day), plateau production period (19.5 years) and extension of the overall contract term to 25 years. New basic project parameters which contribute to reach LUKOIL production and economical milestones and considerably reduce risks are taken into consideration during the preparation of the final Field Development Plan.
Preliminary estimates suggest that LUKOIL's investment in West Qurna-2 will reach $3.7 billion by 2014 inclusively. The project envisages re-entry of existing wells, drilling of several hundreds of new production, exploration, appraisal and injection wells, and construction of water intake facilities in the Persian Gulf, a water pipeline and reservoir pressure maintenance system, as well as a shift camp, access roads, power supply facilities, infield and external pipelines, and the Tuba oil export terminal.
As of today, the field area has been fully demined, a pilot shift camp for 170 people has been built, exploration and development drilling has begun including re-entry of historical wells; engineering and construction of major facilities is underway, including an export pipeline, tank farm at the Tuba terminal, gas turbine power plant, central processing facility and water supply system, as well as training of local personnel in a special educational center and implementation of various social projects. The first oil is scheduled to be produced in late 2013 - early 2014. The I phase of the project is expected to reach capacity by the end of 2014 (Mishrif Early Oil) - 400,000 barrels of oil per day.