Abu Dhabi, UAETuesday 16 July 2019

Russia's Lukoil to maintain oil production rate and investments

Projects outside Russia may include deals in Turkey, Mexico alongside Uzbekistan

Even amid output cuts, Lukoil will continue to pump crude at current rate, it said. Juliana Castilla/Reuters
Even amid output cuts, Lukoil will continue to pump crude at current rate, it said. Juliana Castilla/Reuters

Lukoil plans to keep pumping 100 million tonnes of oil per year between 2018 and 2027 with projects outside Russia and will keep annual investment at US$8 billion to $8.5bn.

Lukoil, Russia's second-biggest oil producer, which has suffered from sluggish output from its Western Siberia fields, has kept production steady by focusing on growth in new regions, such as the Caspian Sea and Iraq. It is also looking at Iran and Mexico.

The Lukoil chief executive Vagit Alekperov announced details of company's 2018-2027 strategy at the launch of the firm's gas facilities in Uzbekistan on Saturday. He said details would be discussed by the board in December.

Under the new strategy, Lukoil planned to add 1.1 billion to 1.2 billion tonnes of hydrocarbon to reserves while its gas output would reach to 35 billion to 40 billion cubic metres (bcm) per year by 2027, he said.

The 2018-2020 budget would be based on an oil price of $50 per barrel and a rouble rate of 62 to 64 roubles to the dollar, said Mr Alekperov, who is also a major Lukoil shareholder.

Lukoil, a big oil products importer on the European market, will continue working on European projects and would keep its retail net in Turkey, the Mr Alekperov said, despite new US sanctions imposed on Moscow this year.

Regarding other projects, he said he would meet the Iranian oil minister Bijan Zanganeh in Moscow on October 3. Tehran has said earlier it expected to sign deals in the next five to six months with Russian firms, such as Lukoil, on developing of Iranian oil and gas resources.

Lukoil has been in talks with the National Iranian Oil Company on taking part in development of the Abe Timur and Mansuri fields in central-western Iran.


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"We are very close, we have some disagreements which are not crucial, regarding output volumes and the pace of coming to any given levels," Mr Alekperov said, adding he was confident the differences could be resolved.

He also said the firm was also talking to Italy's ENI on joint projects in Mexico.

In Uzbekistan, Mr Alekperov said Lukoil would invest $3bn in gas projects by 2021-2022.

Uzbekistan aimed to add output of 1.5 bcm in 2017 to the 2016 level of 55 bcm, said the Uzbekneftegaz head Alisher Sultanov, adding that the country consumed up to 30 bcm per year.

Mr Sultanov said Tashkent had contracts for exporting up to 6 bcm to Russia and up to 10 bcm to China.

Updated: September 23, 2017 07:49 PM