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Statoil CEO Helge Lund and Lukoil CEO Vagit Alekperov in Baghdad Sunday.

(Photo: Statoil)

“We are happy to have secured an important position in Iraq and look forward to further cooperation with Lukoil and Iraqi partners. Our attention now is on safe and responsible development of the field, creating long term value both for Iraq and the companies,” says Helge Lund.

During Iraq’s second licensing round in December Lukoil and Statoil was the successful bidder for the right to develop the field. Based on thorough analysis and an optimised development plan for the field, Lukoil and Statoil were able to bid a production plateau of 1.8 million barrels per day with a remuneration fee of 1.15 dollars per barrel.

The Cabinet of Ministers of Iraq has ratified the contract. The contract validity period is 20 years with an opportunity of extension for 5 years. The parties to the contract are the state Iraq’s South Oil Company and the consortium of contractors consisting of the state Iraq’s North Oil Company (25%), Lukoil (56.25%) and Statoil (18.75%).

Drilling on West Qurna 2 will start in 2011 and first production is expected at the end of 2012. The target production level is expected to be achieved in 2017, and will be held for 13 years. The field development plan provides for additional seismic acquisition and drilling of more than five hundred wells.

The West Qurna 2 field, with recoverable reserves of approximately 13 billion barrels, is located in the southern part of Iraq, 65 kilometers north-west of the large seaport town of Basra.