LUKOIL Group is dedicated to the implementation of oil and gas exploration and production projects in the Middle East and Central Asia, West Africa and Central America.
Shah-Deniz gas-condensate field with an area of 860 km2 is located in the Azerbaijani sector of the Caspian Sea, 100 km southeast of Baku at depths of up to 700 m.
The 40-years long Production Sharing Agreement for the project providing for a possible 12-year extension took effect in 1996, while the discovery of commercial reserves occurred in 2001. Production began in 2006 with the first phase of development delivering more than 10 billion cubic meters per year. The second phase started in 2018 and allowed to increase the designed production level by 16 billion cubic meters per year.
The parties to the project's operating consortium are as follows: BP (operator) – 28.8%, TPAO – 19%, Petronas – 15.5%, SOCAR – 16.7%, LUKOIL– 10% and NICO – 10%.
Recovered gas is delivered to buyers via the South-Caucasus pipeline Baku - Tbilisi - Erzurum, while recovered liquid hydrocarbons are delivered via the Baku-Tbilisi-Ceyhan oil pipeline. The commissioning of the TAP gas pipeline in the end of 2020 allowed to start the commercial gas deliveries to Europe via Southern Gas Corridor pipeline system.
On December 12, 2009, PJSC LUKOIL was awarded a contract for the development of West Qurna-2, one of the world's largest fields.
West Qurna-2 is a major investment project carried out in Iraq by a private company, as part of which maximum production growth has been achieved from a single field.
- West Qurna-2
In May 2012, following completion of the 4th licensing round, LUKOIL in conjunction with INPEX CORPORATION (Japan) was awarded the right to conduct exploration and subsequent development of Block 10.
The 5.5 thousand km2 block is located in Di-Kar and Mutanna provinces, 120 km west of Basra, in the proximity of such major Iraqi oil fields as Rumaila and West Qurna. Production shares are divided as follows: LUKOIL - 60% (operator), INPEX CORPORATION - 40%.
The contract on Block-10 was signed in November, and came into force in December 2012. Between 2013 and 2014, the block had been demined and between April 2014 and February 2015, two thousand linear kilometers of the block were covered by 2D seismic surveys. The seismic surveys helped determine the promising targets for exploration drilling activities.
In 2017, LUKOIL and INPEX successfully tested the first Eridu 1 exploration well at Block 10. Testing of the Mishrif horizon revealed low-sulphur oil influx rate of over 1,000 cubic meters per day. It confirmed the geologists' prediction of a major hydrocarbon deposit at Block 10.
In 2018, we completed seismic surveys, drilled appraisal well which proved geological model and expanded license area.
In 2019, LUKOIL and Oil Ministry of Iraq agreed to consider the possibility of early commissioning of Eridu field.
In 2020 appraisal continued under the approved exploration program. Three new appraisal wells were drilled, confirming the field’s approved geological model and resource base.
- LUKOIL in the Republic of Iraq
The Karachaganak field is located in the West-Kazakhstan region, 140 km away from the city of Uralsk. It is one of the world's largest oil and gas condensate fields.
LUKOIL joined the project in 1997. The operator is Karachaganak Petroleum Operating B.V. Parties to the project include: Shell — 29.25% (co-operator), ENI — 29.25% (co-operator), Chevron — 18%, LUKOIL — 13.5% and KazMunaiGaz — 10%. The total number of staff is around 4.5 thousand people. The field is developed in accordance with the Final Production Sharing Agreement signed in November 1997 effective for a period of 40 years.
The Tengiz field (one of the world's largest fields) and Korolevskoye field that are part of the Tengiz project are located in the Atyrau region in Kazakhstan, 150 km away from the city of Atyrau.
LUKOIL joined the project in December 1997. The project's operator is Tengizchevroil LLP. Parties to the project include: Chevron — 50%, ExxonMobil — 25%, KazMunaiGaz — 20%, LUKOIL (Lukarco) — 5%.
The fields are developed under the agreement made in April 1993 effective for a period of 40 years. The total number of Tengizchevroil staff is around 3.5 thousand people.
Today, all the project's crude oil is shipped via the Caspian Pipeline Consortium (CPC).
Caspian Pipeline Consortium
The Caspian Pipeline Consortium (CPC) is the only privately owned mainland pipeline in Russia and Kazakhstan. The pipeline runs from the Tengiz field to Novorossiysk (Russia), crossing the Atyrau region in Kazakhstan and four constituent entities of the Russian Federation: the Astrakhan region, Republic of Kalmykia, Stavropol territory and Krasnodar territory.
Parties to the project include: OJSC Transneft – 31% (managing the interest held by the Russian Federation – 24% along with CPC Company – 7%); Republic of Kazakhstan – 20.75% (represented by KazMunaiGaz – 19%, and Kazakhstan Pipeline Ventures LLC – 1.75%), as well as Chevron – 15%, LUKOIL – 12.5%, ExxonMobil – 7.5%, JV Rosneft-Shell – 7.5%, Shell – 2%, ENI – 2% and Oryx Caspian Pipeline – 1.75%.
The project agreement was signed in December 1996, while the pipeline was commissioned in October 2001. The pipeline is over 1.5 thousand km long and 1,020 mm in diameter. Its capacity is to 67 mln t per day. The CPC’s oil quality bank ensures that the Company’s selling prices reflect the high quality of its crude.
In April 2019, LUKOIL concluded an agreement with KazMunayGaz for exploration and development of hydrocarbons in the Zhenis block in the Kazakh sector of the Caspian Sea with depths ranging from 42 to 150 metres in the area where the block is located. Parties to the project include: LUKOIL — 50%, KazMunaiGaz — 50%. In accordance with the agreement, the exploration period is 9 years and the production period is 25 years.
- LUKOIL in the Republic of Kazakhstan
Development of the Kandym group of fields is one of the Company's top priority projects. The key facility of the Kandym project is 8 bcmpa gas processing complex, one of the largest in Central Asia. The complex was designed for gas desulfurization and production of marketable gas, stable gas condensate, and marketable sulfur.
In February 2009, LUKOIL joined WEEM Extension project in Egypt (the block is located next to the WEEM block in the northeast). Project participants: LUKOIL- 50% (operator), Tharwa Petroleum - 50%.
Block exploration commitments were performed, which included wildcat drilling and 3D seismic surveying. Pilot operations commenced in 2010, and at that time a 20-year development license was obtained.
Meleiha is one of PJSC LUKOIL's first international production projects. The Company joined it in 1995. Project participants: ENI - 76% (operator), LUKOIL - 24%.
Following intense additional exploration efforts, including 3D seismic surveys and exploratory drilling, several highly productive fields were discovered within the block – North Nada and Gavaher (2007), Arkadia (2010), Emri Dip (2012), Rosa North (2013), and Meleiha-West (2014).
LUKOIL is now implementing WEEM (West Esh El-Mallaha) production project in Egypt (the Eastern desert, in the vicinity of Hurghada). Project participants: Egyptian General Petroleum Company (EGPC) - 50%, LUKOIL - 50%. Production operations have been conducted at the block since 1998. After joining the project in 2002, LUKOIL has ensured quick incremental development of the fields (more than 12 times vs. the first two years of operations).
As part of the WEEM project, a number of infrastructure facilities were constructed, including a tank battery with a total capacity of 9 thousand m3 and a 100 km long export pipeline that connected the block's fields with the oil loading terminals Ras Al-Bihar and Gebel Al-Zeit on the west coast of the Red Sea.
- LUKOIL in the Republic of Egypt
In June 2014, LUKOIL joined the deep-water offshore project in the Etinde block on the Cameroon shelf in West Africa (the deal was closed in March 2015).
The block with an area of 460 km2 is located in the Cameroonian waters of the Gulf of Guinea, 20 km offshore right near the border with Equatorial Guinea. Water depth at the block ranges between 10 and 100 meters.
It is developed on the basis of a product-sharing agreement (PSA) signed in December 2008. In July 2014, a 20-year license was obtained for the development of the Etinde block. Parties to the project include: New Age Ltd. — 30% (operator), LUKOIL — 30%, EurOil Ltd. (Bowleven) — 20%, and Societe Nationale des Hydrocarbures, a Cameroonian National Company — 20%.
In September 2014, LUKOIL joined the offshore deepwater project at OML-140 block on the Nigerian shelf in West Africa (the accession was closed in September 2015). The block with an area of more than 1.2 thousand km2 is located in the Nigerian waters of the Gulf of Guinea, 135 km away from the coast. Water depth at the block ranges from 1.2 to 2.4 thousand meters.
In June 2009, a 20-year license was granted for the development of the block. Chevron (Star Ultra Deep Petroleum) acts as a project operator. Parties to the project include: NNPC, a Nigerian company, — 30%, Oil and Gas Nigeria Limited — 30%, Chevron — 22% (operator), LUKOIL — 18%.
The Nsiko field was discovered within the block as well as a number of promising structures.
In March 2014, LUKOIL joined the offshore deepwater project at the Tano block (Deepwater Tano/Cape Three Points) on the shelf of Ghana in West Africa (the deal was closed in October 2015). The Tano block's area is a little over 2 thousand km2. It is located in the western part of Ghana's water area in the Gulf of Guinea, 80 km offshore in the vicinity of the Cameroonian coast. Water depth at the block ranges from 1.6 to 3 thousand meters.
Seven hydrocarbon fields were discovered within the block: five oil fields and two gas fields.
The Amatitlan block occupies the area of 230 km2 and is located 68 km away from the city of Poza Rica, Veracruz state, Mexico. LUKOIL joined the project in July 2015. Petrolera de Amatitlán SAPI de CV (PdA) acts as a project operator. The Company's share is 50 percent.
The project is implemented in accordance with the service contract for hydrocarbon production. The produced hydrocarbons are the property of PEMEX. The oil produced here is shipped by motor trucks to the Soledad gathering system (30 km away from the Amatitlan block). Operator's hydrocarbon production services are provided on a cost reimbursement basis.
Blocks 10, 12, 28
In June 2017, LUKOIL won the tender under the Second Licensing Round for Block 12. The Production Sharing Agreement was executed in September 2017 with CNH.
Block 12 is in the southern part of the Gulf of Mexico, 50km from the coast (Port of Torno Largo). The area of the block is 521 square kilometers.
In March 2018, LUKOIL in a consortium with the Italian company Eni has been awarded the contract right to the Block 28. The underwriting share of LUKOIL will be 25%. Eni will be the Operator of the license with a 75% stake in the joint venture. The Block is located in the Gulf of Mexico offshore, in water depths between 20 and 500 m.
In November 2018, LUKOIL and Eni signed Farm-Out Agreement on Blocks 10 and 12 in the Mexico's shallow waters. According to the Agreement, LUKOIL assigned 40% in Block 12 to Eni, retains the remaining 60% stake and remains the operator of the project. In its turn, Eni assigned 20% in Block 10, and remains the project’s operator.
Preparation and government approval of exploration programs continued in 2019. First exploration well was drilled at Block 10, resulting in Saasken oil field discovery
- LUKOIL in Mexico
In October 2019, LUKOIL acquired a 5% interest in the Ghasha concession in United Arab Emirates (ADNOC – 55%, operator; ENI – 25%; Wintershall – 10%; OMV – 5%). The Ghasha concession was awarded in November 2018 for 40 years to develop previously untapped deposits in nine offshore oil and gas fields in the Persian Gulf to the west from Abu Dhabi.
The fields are located in an area with a sea depth of up to 24 meters, some 40 km off the coast. The project envisages construction of artificial islands, and onshore and offshore infrastructure facilities.
A tripartite framework Agreement on future cooperation in relation to the Ghasha concession was signed between PJSC LUKOIL, ADNOC and the Russian Direct Investment Fund (RDIF, sovereign fund of the Russian Federation).
In September 2019, LUKOIL acquired a 25% interest in the Marine XII hydrocarbon production project offshore the Republic of Congo (ENI – 65%, operator; Société Nationale des Pétroles du Congo – 10%). The project is implemented under Production Sharing Agreement until 2039.
The license area of 571 square km is located 20 km off the coast, with a sea depth ranging from 20 to 90 meters. Five fields have been discovered within the license area, two of which are in production phase (the Nene oil field and the Litchendjili gas condensate field). The produced crude oil is mostly light and low sulfur.