Building bridges | 347 (May-June 2019)

At the beginning of June investors from all over the word traditionally band together in the northern capital of Russia – Saint Petersburg. In 2019, Saint Petersburg International Economic Forum (SPIEF) took place on 6-8 of June. LUKOIL actively participated in the event. The Company presented to SPIEF attendees not only its business activities, but also digitalization strategy.

2019-07-01 13:06 Views 172

PJSC LUKOIL President Vagit Alekperov hold several important meetings in Saint Petersburg, including meeting with Iraqi Minister of Oil Thamir Al Ghadhban, Republic of Congo President Denis Sassou Nguesso, Governors of Samara, Tula Regions and Khanty-Mansi Autonomous District, as well as the Head of the Komi Respublic of Russian Federation.

The Company announced its intention to realize new projects in the Republic of Congo (Marine 12 offshore field), Azerbaijan (Umid and Babek fields) and Kazakhstan (I-P-2 field on the Caspian shelf).

Besides that, LUKOIL is looking into the possibility of gas processing and petrochemical projects in Iraq, as well as into joining the Ghasha offshore gas concession in the United Arab Emirates.

LUKOIL’s partner ENI is involved in two of the mentioned projects (in Congo and UAE), that means further strengthening of bilateral cooperation. By this moment Russian and Italian companies have been working together in Egypt (Meleiha project) and Mexico (Blocks 10,12,14 and 28 in the Gulf of Mexico).

Abstracts of Vagit Alekperov’s interviews at the SPIEF 2019:

Production volumes

In 2019 we plan to produce 85-86 million tons of oil (including 4 million tons outside of Russia) and 35 billion cubic meters of gas. Our production is stable because every year we compensate it with reserves growth. We are able to increase production in Russia, primarily in the Caspian Region, but we are adhere OPEC+ agreement, as it has stabilized the oil prices.

OPEC+ agreement

OPEC+ agreement cleared the market of the speculators. The oil price ($60-70 per barrel) tells us that speculators are not interested to work on today’s market. Both consumers and producers benefit from this agreement and we believe that the price will remain within these boundaries.

New purchases and acquisitions

We plan to spend $2-3 billion on upstream purchases. Mainly we are interested in conservative assets, including existing projects and projects with good growth opportunities. Most of them are located abroad. We submitted documents for the project in the republic of Congo and hope to close the deal in one and a half - two months. We also have active negotiations with Abu-Dhabi. We are interested to increase our presence in the Caspian Region – in Kazakhstan and Azerbaijan.

Projects in Iraq

Today we produce 430-440 thousand barrels per day on the west Qurna-2 oilfield. We don’t feel any influence of OPEC+ agreement on our operations. To meet its obligations, Iraqi government manages production on the state fields. Our plan to produce 800 thousand barrels per day in 2025 is in place. We started negotiations on Eridu project – it’s a unique discovery, the biggest in the last 20 years on the global market… Work on the pre-FEED is already underway. Considering OPEC+ agreement, we don’t expect Iraq to approve high production levels and look to produce approximately 300 thousand barrels per day from this field.

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