Russia’s LUKOIL invests in Iraq with the drilling of more wells in Block 10 and moves ahead with the full development plan for West Qurna-2 field
LUKOIL has two main areas of operations in Iraq. The main bulk of the company’s activity takes place at the West Qurna-2 oilfield and then there is the exploration of the Eridu field (Block 10) in the south of Iraq, which was the biggest discovery in Iraq over 20 years. At the end of March this year, President of LUKOIL, Vagit Alekperov, visited Baghdad and had a meeting with Prime Minister of Iraq Adil Abdul-Mahdi. The parties discussed the status of projects, among them the geological exploration at Block 10. Earlier in March, LUKOIL and its partner on the project, Japan’s Inpex Corporation, announced that they had successfully completed the testing of the fifth well as part of the field’s appraisal phase. LUKOIL noted that it continues geological exploration at Block 10 and in the midterm the firm plans to drill and test several appraisal wells, complete 3D seismic surveys at the Eridu field and 2D seismic surveys at the block’s southern and central parts. Prime Minister Abdul-Mahdi gave high appraisal of LUKOIL’s operations in the country and expressed support for the intention to deliver first production at Eridu field ahead of time.
West Qurna-2 success
LUKOIL hit a milestone at West Qurna-2 in April this year when it reached 100 million tons of oil as part of successful implementation of Phase 1 of the project. With 147 production wells drilled at the field, the average daily production rate is 400,000 barrels. In April last year, LUKOIL and the Basra Oil Company signed a Final Development Plan (FDP) for West Qurna-2. According to the plan, the oil production of 480,000 barrels per day will be reached in 2020 and 800,000 barrels per day is expected in 2025. To reach the new production targets LUKOIL committed to drilling and commissioning of new production and injection wells, construction and launching of oil treatment, storage and transportation facilities and facilities for gas treatment and power generation. LUKOIL said that with this new agreement it would remain one of the largest investors and employers in Iraq in the coming years.
LUKOIL so far has awarded new contracts to drill production wells at Mishrif and Yamama formations within the Phase 2. The drilling campaign will ramp up production at West Qurna-2 according to FDP. In January 2019, the Company started drilling on the Mishrif Cluster 4 (28 wells planned, and 5 already drilled), in June 2019 – on Mishrif Cluster 9 (26 wells planned) and on the first pilot Yamama well (total 3 pilot wells planned). The drilling of the first pilot well on Yamama formation will be completed in four months. Due to depth of Yamama formation LUKOIL for the first time at the West Qurna-2 oilfield will use a 36-inch drilling bit.
Mishrif and Yamama insight
Starting 2019 on both Mishrif and Yamama formations LUKOIL uses new approach to drilling with two drilling rigs rigged up simultaneously on the well pad. This type of operation is more common in Western Siberia, where artificial islands are often the only possible base for well pads. In the Middle East, one well pad will typically accommodate a single rig that can drill 4-8 wells in total. Tarek Mattar, drilling supervisor said: “With cluster drilling, step-out (horizontal distance between surface and target) could exceed 3,000 meters while in case of single well drilling it will be much less. I’m very happy to have the unique experience of working on this project: new technologies, modern software and a lot of information. It boggles the mind.” While the Mishrif wells will be drilled by Bohai Drilling Company (BHDC), the Yamama ones will be completed by another Chinese contractor – ZPEC. Both contractors are familiar with LUKOIL operations in Iraq: BHDC was involved in the West Qurna-2 drilling campaign in 2014- 2016 as well as exploration drilling on Block 10, and ZPEC – in the West Qurna-2 drilling campaign in 2012-2015 as a subcontractor to Baker Hughes.
LUKOIL is heavily invested in training up the local workforce. As part of the new drilling campaign on the West Qurna-2 it will employ over five hundred Iraqis, residing in proximity to the field. In April, LUKOIL inaugurated a new training facility, the Al Delma Training Centre (in Basra province). The training centre will accommodate up to 400 trainees per year, including Iraqi employees of LUKOIL Mid-East Limited, Ministry of Oil and Basra Oil Company (BOC). The program includes technical and non-technical training courses that will be delivered by Al Delma professional instructors. LUKOIL senior vice president Azat Shamsuarov said at the inauguration: “Being a socially responsible company, LUKOIL focuses first of all on local labour market development. Planned West Qurna-2 project expansion will raise demand for qualified local workforce. Therefore high-quality professional training delivered in a timely manner will become the key factor of the project success.” BOC Director General Ihsan Ismaael added: “The new project has been realized as part of continuous efforts of LUKOIL towards professional development of Iraqi employees in accordance with international standards.”