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Lukoil Negotiating Return

Lukoil Negotiating ReturnLukoil Negotiating Return

Lukoil, the Russian oil and gas company has officially announced its intention to resume operations in Azar and Changuleh fields in Ilam Province, and a meeting has been held between officials of the two countries to that end, managing director of the Petroleum Engineering and Development Company (PEDEC) said, Mehr news agency reported Tuesday.

“Russian companies had previously obtained information on Azar joint oilfields from the National Iranian Oil Company (NIOC) in anticipation of resuming negotiations,” Abdolreza Haji Hossein-Nejad said, although they have yet to embark on anything concrete, he added.

The managing director called on the Russians to “act above board” in the negotiations and said that the NIOC has yet to make a final decision on the return of Russian companies.

Lukoil is Russia’s second largest oil company and its second largest oil producer. According to reports, it produced 1.8 million barrels of oil per day in 2012. Azar oilfield holds an estimated 2.5 billion barrels of oil, of which around 400,000 barrels is recoverable. It is one of the six joint fields with Iraq along with Dehloran, West Paydar, Naft Shahr, Azadegan and Yadavaran.

Changuleh oilfield is located across the Iraqi border in Ilam Province. It is estimated to hold 7 billion barrels in oil reserves. Production is expected to reach a maximum 75,000 barrels per day (bpd) upon completion.

Iranian companies were expected to start operations in Azar field by the end of 2014. However, production was delayed due to budget difficulties and complications in drilling operations.

Production is expected to start with some 15,000 bpd. It is to reach 30,000 bpd in the near future, and eventually increase to 65,000 bpd. Lukoil and the Norwegian oil and gas company Statoil were in talks for the development of Azar field in 2008, but later shied away following mounting US pressure.

At the time, the US state department said it would review their activities to see if it was in breach of Washington’s Iran Sanctions Act, which prohibited investments of more than $20 million in Iran’s oil and gas sectors.

 

Financialtribune.com