Lukoil to bring Asian partners to Iraq

Russia’s No.2 oil producer Lukoil is enjoying higher 1Q earnings and seeking partnership with Asian oil firms to participate in Iraq’s West Qurna-2 project.

“We are holding talks with several potential bidders, including Asian firms. I believe we may get positive news by the end of this year,” Lukoil Vice-President Leonid Fedun said at a company presentation for investors in Hong Kong. A consortium led by Lukoil won a tender in 2009 to increase oil production at West Qurna-2, one of the world's largest oilfields with reserves estimated at 12.9 billion barrels of oil. Lukoil plans to launch production at the field in early 2014.The company holds a 56.25% stake in the group, while Norway's Statoil has 18.75% and Iraq's state oil company the remaining 25%. However, in March Statoil sold its 18.75% stake in West Qurna-2 to Lukoil. The Russian oil company intends to complete the repurchase of Statoil’s stake in the project in May.Lukoil has also released a better-than-expected 7.7% increase in first-quarter earnings to $3.79 billion, with higher oil prices helping to offset a slight fall in production. The company says its earnings could have seen a more significant rise but for a hike in extraction tax and export duty expenses.Lukoil said its first-quarter sales grew 19% to $35.26 billion from $29.63 billion in the same period a year earlier, slightly beating estimates.The company also said its first quarter crude oil and natural gas liquids fell 1.7 pct to 169.0 million barrels.Lukoil said its net income was supported by a decrease of income tax expenses due to currency translation losses reported by its Russian units.The company's shares were up 1.7% to 1,666 roubles in Moscow trading, slightly outperforming the broader MICEX index which was up 0.90 percent.