Iraq’s state-owned Basrah Oil Co. (BOC) has subcontracted management of the 480,000 barrel per day West Qurna-2 project to a consortium of Italian engineering firm Bonatti and Hilal al-Basrah.The reason given by BOC to project leader Lukoil, in a letter dated Feb. 2 and seen by Energy Intelligence, was to mitigate the impacts of the force majeure declared by the US-sanctioned Russian firm back in November.The move follows Lukoil’s announcement late last week that it has provisionally agreed to sell its international assets to US private equity group Carlyle, pending approval from Washington.Lukoil will oppose the BOC move and believes the state-owned firm has no contractual authority to subcontract management, which rests with the Russian firm, despite its declaration of force majeure, argues one industry source close to the project.Lukoil continues to work at the field, with production stable at around 480,000 b/d. The Russian firm has not been paid or lifted any crude in kind since November, the industry source adds.The BOC letter handed Bonatti and Hilal al-Basrah management of West Qurna-2 “for a period of six months, renewable for another six months.”In addition to a 75% stake in West Qurna-2, the sanctioned Russian major has an 80% stake in the yet-to-be-developed 12.9 billion barrel Block 10 project.The letter is likely part of a strategy on the part of Baghdad to “nudge [Lukoil] to give up [West Qurna-2] and go,” argues the source.Similarly, Shell’s exit from Majnoon in 2018 allowed BOC to subcontract management of the 240,000 b/d capacity oil field to China’s Anton Oil Field Services, KBR and the Wood Group.While Shell exited Majnoon of its own volition, Lukoil's exit is being forced by sanctions, and it wants be compensated for its investment, the source added, mentioning a figure of "$500 million.”West Qurna-2 IncentivesThe industry source believes any Carlyle entry into West Qurna-2 would necessarily involve other partners as it lacks the capability to run the field on its own. Chevron too has expressed interest in the project but only on radically improved terms.Lukoil currently gets a $1.15 per barrel remuneration fee for West Qurna-2, the lowest of all Iraq’s major oil projects. Chevron is seeking either to increase the reimbursement fee or move from the current technical-services contract to a profit-sharing arrangement, sources say.In terms of a fee, Chevron is said to have sought a $15/bbl fee, more than 10 times Lukoil’s fee and a level unacceptable to Baghdad, says the industry source.For the US major, a greenfield Block 10 project, which has none of the legacy challenges that have bedeviled West Qurna-2, is probably a greater prize. Production of 250,000 b/d is envisaged here, with a $5.99/bbl fee negotiated.A new contract structure for West Qurna-2 is probably not on the cards, argues Muhammed Abed Mazeel al-Aboudi, former head of the Iraqi Oil Ministry’s Reservoir and Fields Development Directorate. “The law does not allow variation in this regard, and no government authority can change it at the moment,” he told Energy Intelligence.Iraq’s “prime minister may consider offering a more favorable fiscal regime; however, this would be risky,” al-Aboudi said. “Lukoil could initiate arbitration against the Ministry of Oil and the government, and domestically it could create future political and legal challenges for both the prime minister and the Ministry of Oil.”Bonatti’s partner, local firm Hilal al-Basrah, is clearly well connected, having signed last year, together with China’s Geo-Jade, for a 100,000 b/d development at the Tuba field.Bonatti, Hilal al-Basrah, Chevron and Iraq’s Oil Ministry all declined to respond to requests for comment and information. (ICE AMMAN)

Fonte notizia: Stampa Locale