„Lukoil“ has declared force majeure at Iraq's „West Qurna-2“ field, Reuters reports, citing its sources.
According to them, Iraq has halted all cash and crude oil payments to the Russian company. „West Qurna-2“ is one of the world's largest fields, located in southern Iraq, 65 kilometers northwest of the port city of Basra.
The field's initial recoverable reserves are approximately 14 billion barrels. More than 90% of these reserves are concentrated in the Mishrif and Yamama fields. The field is being developed under a service contract signed by “Lukoil“ in January 2010. The Russian company owns a 75% stake in the project, with the remaining 25% held by Iraq's state-owned “Northern Oil Company“.
Last Tuesday, “Lukoil“ sent an official letter to the Iraqi Oil Ministry, saying that there were force majeure circumstances that prevented the company from continuing its normal operations at the “West Qurna-2“ field, the four sources said.
If the reasons for the force majeure are not eliminated within six months, “Lukoil“ will stop production and abandon the project altogether, a senior Iraqi oil industry official said.