Lukoil, Russia’s largest private sector company, is on the cusp of awarding several contracts to engineering and services firms as part of its multi-billion dollar development of the supergiant West Qurna 2 oil concession.
Dow Jones Newswires, citing a senior Lukoil executive, reports that the company is in the final stages of evaluating commercial and technical bids for contracts competing to build the central processing facility, export pipelines, tank farms, and a 126-megawatt power station.
Lukoil, which operates the field for partners Statoil and Iraq’s South Oil Company, is locked into a 20-year technical services contract to develop the field at fee-per-barrel remuneration of $1.15 before tax once a production capacity threshold is reached.
According to other sources, five companies had been shortlisted: Saipem , SNC Lavalin, Punj Lloy , Globalstroy and South Korea’s Samsung Engineering.
Two other bidders, Petrofac and Technimont, are reported to have been dropped, according to a Reuters report.
The biggest package will be the construction of the CPF which will enable the consortium to produce 400,000 barrels of oil a day from West Qurna-2 by 2014 as part of the first-stage development of the field.
The field is slated to produce 150,000 barrels a day (bpd) from 2013, reaching 400,000 bpd in 2014 as the central processing facility is brought on stream.
Lukoil has already awarded the drilling and completion package to Baker Hughes, which is to drill 23 wells at the field. According to the executive quoted in the Dow Jones report, the first well is underway, with drilling beginning three weeks ago.
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