The second largest oil company in Russia, Lukoil, is looking at boosting oil production from its assets in Iraq once the quotas agreed by the OPEC+ group are relaxed.
The company runs the West Qurna-2 oil field, which was producing about 400,000 barrels per day (bpd) last year. Due to Iraq’s larger efforts to keep within its OPEC+ quota as part of measures put in place in the wake of the COVID-19 pandemic, this has been reduced to 280,000 bpd. Lukoil’s previous plan was to expand production in the field to 480,000 bpd.
While it doesn’t see oil production increasing in the short term, Lukoil is clearly looking ahead, as Egor Zubarev, the firms’ Managing Director for Middle Eastern Business, said in an email to Bloomberg that it will shortly submit plans to develop a new area to the south. He also said:
“The current situation forces us and our partners to revise our plans to see how they correspond to the needs of the time.”
In addition, Zubarev emphasised that Iraq continues to be a focus for Lukoil.
A draft law introduced in 2007 allowed foreign oil companies to explore and develop oil fields in Iraq, and companies like Lukoil, Total and BP, which owns the Castrol lubricant brand, have since established presences in the country. Iraq has a long-standing target of producing and exporting about 5 million bpd of oil, but Zubarev notes that better facilities and export facilities will be needed when it is ready to increase production again.
