BAGHDAD / Aswat al-Iraq: Russia's second-largest crude producer LUKOIL said it had cut its production plan in Iraq by almost a third in line with the government's efforts to increase the lifetime of its oilfields.
LUKOIL Overseas head Andrei Kuzyayev said the firm was now looking for peak production at the West Qurna-2 oilfield of 1.2 million barrels per day (bpd), not 1.8m bpd as previously envisaged.
West Qurna-2 is the world's second-largest undeveloped field with recoverable reserves of around 14 billion barrels, according to LUKOIL.
He said the government had decided to cut peak production to prop up prices and help its economy.
"That's why the leadership has decided to limit production in the country to 9m bpd, not 12m bpd."
The Iraqis have analysed the situation for the last three years and came to the conclusion that they didn't need sharp rises in peak production.
"That's because the peak production will lead to creation of excessive infrastructure.
And going forward, when production will start to sharply decline that would create an unstable macro-economic situation," he added.
Iraq has signed contracts with foreign firms that target total production capacity of 12m bpd by 2017, but has been reviewing the target.
"In return for cuts we got a substantial increase in the lifetime of the plateau production, which has been envisaged to last 12 to 13 years, while now it has been revised to 19 years," he said.
Any deep cut to overall target could mean the deals could need to be adjusted to accommodate lower production plateaus, which would mean lower returns for firms in the short term.
Output in 2013 was targeted to reach an average 3.7m bpd - just shy of an all-time high of 3.8m bpd in 1979.
Exports are expected to run at 2.9m bpd, including 250,000 bpd by the northern Kurdistan Regional Government.
LUKOIL controls 75 per cent of the West Qurna-2 oilfield and has been looking for a partner to replace Statoil which decided to leave the project earlier this year.