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Share Price: 510.40
Bid: 509.40
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Change: -5.40 (-1.05%)
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Open: 516.30
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UPDATE 1-Gazprom Neft delays Iraq oilfield launch, cites safety concerns

Tue, 19th Nov 2013 09:48

* Safety one of main concerns for foreign companies in Iraq

* Iraq says restoring calm after protests in Schlumbergercamp

* Lukoil to begin oil output in West Qurna-2 by early 2014

MOSCOW, Nov 19 (Reuters) - Russia's Gazprom Neft,the oil arm of state-controlled Gazprom, has postponedinitial production at its Badra oilfield in Iraq until 2014 dueto safety concerns and logistical problems, the company said onTuesday.

Iraq, OPEC's second-biggest oil producer, expects a robustreturn to growth next year as foreign companies at work in itssouthern oilfields push output toward the highest level ever.

Still, safety is one of the main concerns, highlighted lastweek when dozens of Shi'ite Muslim workers and tribesmen stormedthe Schlumberger Ltd camp in North Rumaila afteraccusing a foreign security adviser of insulting their religion.

Gazprom Neft said in a Eurobond prospectus it had postponeda December launch due to "the failure on the part of certaincontractors to fulfill their contractual obligations and certainissues related to the safety and security of employees andproperty."

It also cited delays by Iraqi authorities over tenderapprovals, holdups to customs clearance for import cargo and ashortage of local contractors.

Gaining foreign business is key for Gazprom Neft to reachits production target of 100 million tonnes per year (2 millionbarrels per day) by 2020, double current levels.

It said in April that by 2017 as much as 170,000 bpd ofcrude oil could be produced for seven years at Badra.

Iraqi officials have said calm is being restored and thatthe situation at the BP-operated Rumaila oilfield - coreto the country's oil expansion plans - is now safe forSchlumberger to get back to work.

Apart from Gazprom Neft, Russia's No.2 oil producer Lukoil is preparing to launch its West Qurna-2 oilfield inIraq later this year or early in 2014. It declined to comment onwhether recent violence had affected its operations.

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