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No Private Deals Says Lukoil

By MarEx 2014-01-22 17:52:00

Russia's privately-owned Lukoil has said that it will continue to sell all its gas production to export monopoly Gazprom and not follow Novatek or Rosneft in seeking independent outlets, Russian newspaper Vedomosti has reported.

Industry sources say the two current partners are preparing a new agreement on strategic 5-10 year cooperation agreement to be signed in March when the current accord expires.

Gazprom chairman Alexey Miller and LUKOIL President Vagit Alekperov were reported to have discussed the deal a week ago, proposing an arrangement running 5-10 years.

The accord may change prices and increase supplies. Once Lukoil starts developing Caspian fields, it will also sell its share of this gas to Gazprom.

Lukoil currently produces gas from the Yamalo-Nenets field but will commission three large fields within five years at Pyakyakhinskoye, Yuzhno-Messoyakhskoye and Khalmerpayutinskoye.

This could increase gas production almost threefold by 2020, from 8 billion cubic meters in 2013 to 23 billion cubic meters. 

LUKOIL’s Board of Directors held a meeting in Moscow today to summarize the company’s preliminary performance results from 2013 and set priorities for 2014.

Lukoil’s board of directors has set priorities for 2014 including:

* Exploration programs in Iraq, West Africa, Romania, the Baltic Sea, the Komi Republic, Samara Oblast and the Northern Caspian Sea;

* Start of commercial hydrocarbon production at West Qurna-2 field in Iraq scheduled for the first half of 2014;

* Implementation of operating plans to develop fields in the Northern Caspian Sea, the Bolshekhetskaya Depression, the Imilorsko-Istochny and V. Vinogradov license areas located in West Siberia, the Denisovsky and Yaregsky license areas located in the Timano-Pechora Province and the fields of the Samara Oblast;

* Implementation of measures aimed at increasing utilization of associated petroleum gas;

* Conduct of pilot operations to bring into development the proved undeveloped reserves of fields located in the Nenets Autonomous Okrug;

* Introduction of new highly efficient technologies to bring the hard-to-recover reserves into development and enhance the oil recovery.