Lukoil will own piece of Iraq

A consortium of Russian oil company Lukoil (85%) and Norway's Statoil (15%) won the right to develop Iraq's West Qurna 2. Its recoverable reserves are estimated at 12.9 billion barrels. The consortium will give 25% of the Iraqi state oil company. Accordingly, the share of Russian oil to fall to 63.75%. The consortium will receive a fee of $ 1.15 for each barrel in excess of the level of 120 thousand barrels. per day, planned volume - 1.8 million barrels. "All these years we have continued to fight for the Iraq project, fulfilling the promise made to our shareholders. Today we have a well-deserved victory and we intend, together with its Norwegian partners to fulfill all our commitments on development of deposits of West Qurna-2" for the Iraqi people and our shareholders. This project is strategically important for our company, "- said the president of LUKoil Alekperov. LUKoil will not include stocks of West Qurna-2 in its base stock and will not receive additional income in the event of higher oil prices, however, the Russian company is naturally protected from falling commodity prices. From a fundamental point of view of the news is moderately positive, because it only marginally increases the cash flows and hence shareholder value, "- commented Bank.ru Ph.D. Alexander Razuvaev, Head of Research IR Gallion Capital. Another Russian company, which participated in the tender, Gazprom Neft, has become the largest member of the consortium to develop the field of Badr with oil reserves of the order of 2 billion barrels. Russians get in project 30% of its partners - the Korean Kogas 22,5%, Malaysia's Petronas 15%, Turkish TPAO 7.5% blocking stake will remain with the Iraqi government. In Iraq, torn and Western giants. The government has already signed contracts with Shell, Eni, BP and ExxonMobil. Despite the enormous risks in a country at war, world players in the oil market tend to get their share in the Iraqi pie. Now, Iraq produces about 2.5 million barrels of oil per day, but aims to 6 years to increase production to 12 million barrels of oil per day. As we said one expert, "Lukoil is already three years ago, actively tried to enter the Iraqi market. There were plans to hire a Russian military specialists, to create a network of informants in Iraq, etc. "The global corporations have a large and successful experience in problematic regions. The risks are, but worth it. Iraq - the only country with huge oil reserves, where practically being produced. When exactly will begin development of the field is unknown, at least, is planned to produce at least 1.8 million barrels per day. Reserves "Qurna" estimated at 12 billion barrels, while all stocks of LUKoil - 20 billion. Any future government, if it is a little bit sane, will not change the conditions of contact and will continue to work with investors. Since this is money "- says Razuvaev.