Lukoil begins output from giant Iraq oil field

BASRA: Russia's Lukoil began commercial production from one of the world's largest
untapped oil fields in Iraq on Saturday, as the country raises output to record levels.
Production from the giant West Qurna-2 is eventually expected to reach 1.2 million barrels per day (bpd), from an initial 120,000 bpd.
The field is one of several that form the backbone of Iraq's plans to revive its oil sector and lift the economy after decades of sanctions and war.
At a ceremony to inaugurate the field, Iraqi Oil Minister Abdul Kareem Luaibi said output from West Qurna-2 would enable Iraq to reach a production target of 4 million bpd by the end of the year.
Output from Iraq, already the second-largest producer in OPEC, averaged 3.5 million bpd in February.
The launch of West Qurna-2, with recoverable reserves estimated at around 14 billion barrels, will allow Lukoil, which holds a 75-percent stake in the field, to more than double its overseas output.
“The start of production at West Qurna-2 is strategically important for Lukoil," said CEO Vagit Alekperov in a statement.
Russia's no 2 oil producer saw its production rise 1.1 percent last year and is aiming for a 1.5 percent rise this year with the boost from West Qurna-2.
The world's leading oil companies have been expanding other giant fields in Iraq's south - Rumaila led by BP, West Qurna-1 run by Exxon and Zubair operated by Eni
- since 2010 when they signed a series of service contracts with Baghdad.
That revival, now into its fifth year, prompted Iraq to set an export target of 3.4 million bpd for 2014, including 400,000 bpd from the Kurdistan region, implying output of 4 million bpd, including oil used domestically.
Oil experts still see that as optimistic, but growth is returning thanks to the expanded capacity at southern export terminals and further rises from the fields of Majnoon, led by Shell and Halfaya, where PetroChina is the operator.
Kurdistan has also agreed to contribute 100,000 bpd as of April 1 in a move to resolve a dispute with the Baghdad government over exports of oil from the autonomous region.