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INTERVIEW-Russia's Lukoil hopes to secure deal on two Iranian oilfields in April
February 27, 2017 / 3:17 PM / 5 months ago

INTERVIEW-Russia's Lukoil hopes to secure deal on two Iranian oilfields in April

3 Min Read

* Lukoil's CEO Alekperov says contracts in Iran seen feasible

* Alekperov sees capex at $8 bln in 2017

* Lukoil's oil output to rise if supply pact not extended

By Olesya Astakhova

SOCHI, Russia, Feb 27 (Reuters) - Russia's No. 2 oil producer Lukoil hopes to reach a deal to develop two oilfields in Iran in April, Chief Executive Vagit Alekperov said on Monday.

Lukoil said last month that it was in talks with the National Iranian Oil Company (NIOC) on taking part in development of the Abe Timur and Mansuri fields in central-western Iran. It said it would start talks on contractual terms if Iran agrees to the development plans Lukoil has already submitted.

"A large number of our experts have been working in Iran. Once the (new) oil law in Iran is in place - it has not been completed yet - we, with the current pace of work, will be able to be ready for signing the deal in April," the veteran chief executive told Reuters.

Iran, the third-largest oil producer within the Organization of the Petroleum Exporting Countries, has been seeking to boost oil output and attract foreign investment since the lifting of international sanctions last year.

Its new oil and gas contract model, the Iran Petroleum Contract (IPC), is part of an effort to offer sweeter terms on oil development projects.

Last month Iran named 29 companies - including Lukoil - from more than a dozen countries that will be allowed to bid for oil and gas projects using the IPC model.

Some industry analysts say the IPC won't be attractive enough to draw billions of dollars in foreign direct investment at a time of low global oil prices, especially when compared with new contracts being offered by Iraq, which have enabled Iran's neighbour to boost its output.

However, Alekperov said preliminary calculations indicated the deals should be feasible and Lukoil wanted to develop the oilfields without partners.

Production Cut

The Russian company is already developing the huge, West Qurna-2 oilfield in neighbouring Iraq and Alekperov previously said that it planned to invest $1.5 billion into the field, where production has reached 400,000 bpd this year.

Alekperov said Lukoil's total capex would reach $8 billion this year, on a par with 2016, and the company has based its budget this year on an average Brent crude price of $40 a barrel.

He expects Lukoil's oil output to rise slightly this year if OPEC and non-OPEC producers' pact to reduce output is not extended into the second half.

Lukoil has already reduced its daily production by 2,000 tonnes (14,600 bpd) as part of the deal, but rising oil prices have offset the output cut, Alekperov said. (Reporting by Olesya Astakhova; Writing by Vladimir Soldatkin; Editing by Susan Fenton)

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