x Abu Dhabi, UAESaturday 22 July 2017

Russia's Lukoil wins big in Iraq oil auction

A consortium led by Russia's private oil giant has won the biggest prize of Iraq's second oil auction this year.

A consortium led by Russia's private oil giant won the biggest prize of Iraq's second oil auction this year, nabbing a field initially promised them a decade ago by Saddam Hussein while other companies have showed little interest in offerings outside the secure southern part of the country. Lukoil and Norway's Statoil ASA won rights to develop the 12.88 billion barrel West Qurna Phase 2 field in the Basra region, beating out three other consortiums led by France's Total SA, Malaysia's state-run Petronas and British giant BP PLC.

The field was the crown jewel of Iraq's second international oil auction, which has placed some of the country's most coveted sites up for grabs compared with the riskier fields that drew little interest in the first auction in June. In all, 15 fields were offered over two days, and of the seven offered today, four were awarded. "It is a big victory for Iraq," the Oil Minister Hussain al-Shahristani told reporters after the final field was auctioned.

"It is a big achievement for Iraq to win such contracts at the current prices." Mr al-Shahristani said the contracts awarded during the two days, coupled with those awarded during the past few months, including the June auction, would help the country boost production to 12 million barrels per day in six years. Iraq currently struggles to produce 2.5 million barrels a day. The aggressive interest in West Qurna 2 - the biggest of the 15 offered - reflected not only its ample reserve base and cheap development costs, but its location in the relatively Shiite heartland in Iraq's south.