I’m happy to visit Moscow again. Yesterday we held a meeting with Russia’s venerable Minister of Energy.
Good day; good to see you here!
Jabbar Ali al-Luiebi: Thank you.
My first question concerns your meeting with [Russian] Energy Minister Alexander Novak and LUKOIL President Vagit Alekperov. What did you discuss?
Jabbar Ali al-Luiebi: I’m happy to visit Moscow again. Yesterday we held a meeting with Russia’s venerable Minister of Energy. We discussed cooperation between Iraq and Russia in the oil and gas sectors and ways to strengthen our mutually beneficial relations. The Minister expressed an interest in increasing Russia’s role in Iraq’s oil and gas sector. We also discussed this cooperation with LUKOIL’s President, Mr. Alekperov. We concentrated on OPEC’s agenda and declaration in detail. I assured the Minister that Iraq is fulfilling its obligations to restrict oil production in accordance with the agreement between OPEC and other oil-producing countries 100%. We’re doing this both in the interests of our country and to facilitate market stability. Our Prime Minister places great significance on fulfilling the terms of OPEC’s declaration. We also discussed the [upcoming] meeting of the [relevant] monitoring committee, which will take place at the end of the month. Mr. Novak invited me to participate, and I think I will, in fact, go to Vienna as there are differences in reporting. These differences don’t have any basis; mostly they don’t reflect accurate data. It’s unclear where they get these indicators; they do not reflect reality.
What other issues did you discuss?
Jabbar Ali al-Luiebi: We also discussed cooperation between our countries, including via the Committee for Russo-Iraqi Cooperation. I suggested holding a meeting of this group at least twice a year, and the Minister supported my idea. That was the first part of our visit. We had two busy days of meetings and negotiations with LUKOIL as the second part. We examined a number of unsolved questions that are now close to being resolved and I’m happy we were able to accomplish this. We also had a meeting with Gazprom in which we discussed a number of issues of concern. We were able to resolve most of them as well. Overall our visit was successful. We achieved highly positive and useful results.
You mentioned OPEC’s [upcoming] meeting in Vienna. What are your expectations? I know that Russia and Saudi Arabia have called on all signatories to the [oil production limiting] agreement, both OPEC members and nonOPEC members, to extend it by three months. What do you think? What do you expect from the meeting?
Jabbar Ali al-Luiebi: As you know, the agreement lasts until the end of March 2018.
They want to extend it for another three months.
Jabbar Ali al-Luiebi: We have to look at the situation on the market; it’s too early to discuss this question now. Let’s wait and make a decision based on how the situation develops. There’s nothing else we can do. There are a lot of discussions on this subject. Some ministers are calling for additional measures or extending the timeframe. But in my opinion it’s best to wait until the end of March and look at the market situation then.
Iraq and LUKOIL have two projects: Block 10 and West Qurna-2. What kind of future do you foresee for them?
Jabbar Ali al-Luiebi: I see a positive future. We agreed on a new production plateau for West Qurna-2 and touched on the issue of utilizing the oilfield’s gas output. We can see a serious process taking hold here, as with utilizing pressure water in the underground layer. We received positive responses from LUKOIL. As for Block 10, the project holds a lot of promise, and we hope that it will facilitate an increase in our proven reserves.
Is LUKOIL considering investing in the gas processing project at West Qurna-2? What are the project’s terms?
Jabbar Ali al-Luiebi: Today there are some mitigating factors that inhibit fully utilizing Iraq’s natural gas. Currently we utilize around 55% of oilwell gas, but we’re set on signing a contract by the end of this year that would allow us to utilize all oilwell gas in the south of Iraq. We’re in negotiations with 4-5 very well-known companies and we’ve signed a memorandum of understanding with GE under which they will analyze ways we could completely utilize oilwell gas in the Nasiriyah and Dhi Qar provinces. We’re also conducting negotiations regarding other provinces, namely, Basrah and Maysan. I’m convinces that we’ll have a contract by the end of this year to utilize all oilwell gas there. This will significantly increase Iraq’s levels of gas production and exportation and, subsequently, our revenues.
A question about Block 10: when do you think the first shipments of oil will arrive on the market? What level of production should we expect?
Jabbar Ali al-Luiebi: Block 10 is a promising project. LUKOIL asked us to increase the licensed territory and we gave a positive response. They asked us to launch production at a daily level of 30,000 barrels at an accelerated pace and we agreed. It’s a good region, a good oilfield and a very promising one, like all of [the province of] Nasiriyah.
Thank you for the interview.
Jabbar Ali al-Luiebi: Thank you.
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