Lukoil has started production drilling and construction of an oil processing unit at the West Qurna-2 field, which has estimated reserves of 14 billion barrels
The project will see the Russian oil company invest close to US$25 billion in the 340sq-km field. The firm plans to boost production by up to 150,000 barrels daily in 2013 to recover the investment costs.
"We have opened the active field development stage today. Upon reaching the production volume of 150,000 barrels per day, Lukoil receives the right to reimburse expenses and receive remuneration, said Lukoil president Vagit Alekperov.
This is the first oil well out of 23 directional wells to be constructed, and drilling operations would occur simultaneously at five well pads to depth of 5,000 metres without equipment remounting, according to the company.
The units are specially modified to be immediately relocated within the well pads under the cluster slider rig scheme. Drilling operations will then be conducted at the other four well pads with similar units.
The central processing unit would be constructed along with the facilities for well pads infrastructure development and oil gathering lines as well as other support facilities.
With Iraq expected to be the world's biggest source of new oil supplies over the next few years, Lukoil had signed a 20-year deal in 2009 to develop the West Qurna-2 oil field, with the possibility of five-year extension.
Last month, Norway's Statoil sold its minority 18.75 per cent stake to Lukoil, making it the sole foreign partner in the project with a 75 per cent share, while the Iraqi state-run North Oil Company holds 25 per cent.
