January 13, 2014 / 1:45 PM / 4 years ago

UPDATE 1-Russia's Lukoil halts oil production decline in 2013

2 Min Read

* Lukoil increased 2013 oil output by 1 pct to 90.8 mln T

* Due to launch Iraq's West Qurna-2 oilfield by April

MOSCOW, Jan 13 (Reuters) - Russia's No.2 oil producer Lukoil managed to reverse a prolonged decline in its oil production last year, increasing output by 1 percent to 90.8 million tonnes, or over 1.8 million barrels per day, it said on Monday.

Lukoil had suffered a three-year fall in oil production as it failed to offset output cuts at its aging West Siberian oilfield with more extraction at new deposits. Its new fields in the Timan-Pechora region in northern Russia also fell short of hopes.

To arrest the halt, the company increased its exposure to overseas upstream projects, including the giant West Qurna-2 oilfield in Iraq, which it aims to launch by April.

It also acquired new assets in Russia, such as Samara-Nafta from Hess Corp for over $2 billion.

At the same time, Lukoil has faced constraints in Russia - such as limited access to offshore fields - where the energy landscape is dominated by Kremlin-controlled firms.

The company said it produced 85.5 million tonnes of oil in Russia and 5.3 million tonnes overseas last year.

Lukoil's daily oil output fell 1.5 percent in 2012 year-on-year to 1.8 million bpd, of which some 110,000 bpd were extracted abroad, mainly from Kazakhstan.

Lukoil also said it had replaced 112 percent of the hydrocarbons it produced in 2013 thanks to increased exploration activity and 42 new licenses for subsoil use.

The expected launch of West Qurna-2, the world's second-largest undeveloped field with recoverable oil reserves of around 14 billion barrels, will allow Lukoil to more than double its overseas oil output.

The company has said it aims to reach production of 120,000 barrels per day (bpd) from the field in the first quarter of 2014, with output of 1.2 million bpd at its peak, but plans have yet to be finalised with the Iraqi government.

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