* LUKOIL is involved in West-Qurna-2
* Says too risky to enter West Qurna-1
* Chinese companies became frontrunners for the Exxon's
MOSCOW, Dec 24 Russia's second-largest crude
producer LUKOIL said on Monday it had decided not to
join the development of Iraq's West Qurna-1 oilfield, citing
high risks, paving the way for Chinese companies to enter the
LUKOIL oversees the largest share of oil reserves in Iraq
among foreign companies and is already involved in the West
Qurna-2 project, while company's from energy-China are vying for
"We have analysed all the risks and decided that, as we have
been implementing such a global project as West Qurna-2 without
a partner, we would have taken great risks by entering another
big project such as West Qurna-1," Andrei Kuzyayev, head of
LUKOIL Overseas, told Russian state TV channel Rossiya-24.
West Qurna-1 became available for LUKOIL and other majors
last month when ExxonMobil has informed the Iraqi
government it wants to pull out of the $50 billion project in
Iraqi and Chinese sources said CNPC unit Petrochina
is negotiating for Exxon's 60 percent in West
Qurna-1 project and that there are rival bidders. Royal Dutch
Shell is a minority partner.
For China, a major buyer of Iraqi crude, access to reserves
is a strategic imperative, and Beijing is prepared to accept
tougher terms and lower profits than Western oil majors and even
Russian firms which have to answer to shareholders.
Baghdad expects Exxon to complete the sale of its shares in
West Qurna-1 by the end of December and the U.S. company has
told Iraq it is already in talks with other oil majors.
The U.S. firm has riled the Iraqi central government by
signing deals with the autonomous Kurdistan regional government.
LUKOIL has been trying to offset production declines at its
brownfields in Russia's West Siberia which accounted for some 56
percent of its total production last year by increasing its
portfolio of foreign upstream assets.
LUKOIL owns 75 percent in West Qurna-2 and has been looking
for a partner to replace Statoil which decided to leave
the project earlier this year, but declined to name any