(Adds Shahristani quote, context)
By Aref Mohammed
BASRA, Iraq, March 29 Russia's Lukoil
began commercial production from one of the world's largest
untapped oilfields in Iraq on Saturday, as the country raises
output to record levels.
Production from the giant West Qurna-2 is eventually
expected to reach 1.2 million barrels per day (bpd), from an
initial 120,000 bpd.
The field is one of several that form the backbone of Iraq's
plans to revive its oil sector and lift the economy after
decades of sanctions and war.
At a ceremony to inaugurate the field, Iraqi Oil Minister
Abdul Kareem Luaibi said output of 400,000 bpd from West Qurna-2
by the end of the year would help Iraq reach a production target
of 4 million bpd for 2014.
Output from Iraq, already the second-largest producer in
OPEC, averaged 3.5 million bpd in February.
The launch of West Qurna-2, with recoverable reserves
estimated at around 14 billion barrels, will allow Lukoil, which
holds a 75-percent stake in the field, to more than double its
"The start of production at West Qurna-2 is strategically
important for LUKOIL," said CEO Vagit Alekperov in a statement.
Russia's no 2 oil producer saw its production rise 1.1
percent last year and is aiming for a 1.5 percent rise this year
with the boost from West Qurna-2.
The world's leading oil companies have been expanding other
giant fields in Iraq's south - Rumaila led by BP, West
Qurna-1 run by Exxon and Zubair operated by Eni
- since 2010 when they signed a series of service contracts with
Iraq has set an export target of 3.4 million bpd for 2014,
including 400,000 bpd from the Kurdistan region, implying output
of 4 million bpd, including oil used domestically.
Oil experts still see that as optimistic, but growth is
returning thanks to the expanded capacity at southern export
terminals and further rises from the fields of Majnoon, led by
Shell and Halfaya, where PetroChina is the
Iraqi exports are also due to get an additional boost next
month from Kurdistan, which recently agreed to resume pumping
100,000 bpd as a "gesture of goodwill" aimed at easing a dispute
with the federal government in Baghdad.
Kurdistan stopped exporting via the national network more
than one year ago due to a row over payments for oil companies
operating in the region, and has since finished building an
independent pipeline to Turkey.
Baghdad claims sole authority to manage all the country's
crude and refuses to cover the costs of companies that have
signed contracts with the Kurds, rejecting those deals as
"We hope the differences will be solved and exportation of
the oil produced in Kurdistan will begin next month," Deputy
Prime Minister for Energy Hussain al-Shahristani said at the
(Additional reporting by Raheem Salman in Baghdad; Writing by
Isabel Coles; Editing by Elaine Hardcastle)