Alekperov: LUKOIL in 2016-2017 will keep investment at the level of $9 billion

Alekperov: LUKOIL in 2016-2017 will keep investment at the level of $9 billion

MOSCOW, December 17. “LUKOIL” in 2015, produced 126 million tons of hydrocarbons, including 95.5 million tons of oil; the total investment amounted to slightly more than $9 billion, and at that level, they plan to save in the period of 2016-2017 years, said company President Vagit Alekperov told reporters.

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“The company has consistently worked (past) year, investments amounted to slightly more than $9 billion and hydrocarbon production of 126 million tonnes of oil will be 95.5 million tons,” he said. In 2018 the production of hydrocarbons is forecasted at 127 million tons.

The company has provided reserves of 100 million tons of standard coal, reducing the production.

According to Alekperov, LUKOIL in April-may next year may reconsider the investment program for 2017-2018.

“In 2016 we are not going to change, and in 2017-2018 may be adjusted after the first quarter, i.e. in April-may,” he said.

Alekperov said that LUKOIL has budgeted for 2016 the price of oil at $50 a barrel, but also made the calculations for $40. For 2017-2018, the price is set at $60 per barrel. Alekperov stressed that in 2016, the company has formed a reserve of $3 billion through the sale of assets in the Caspian sea and Uzbekistan, as well as cost optimization. According to him, this will allow the investment program in 2016, regardless of changes in oil prices.

Starting in the Caspian sea

According to the President of NK “LUKOIL” expects to keep the timing of the start of production from the field name field (Caspian sea), despite the backlog in supply of equipment of the United shipbuilding Corporation (USC).

“Schedule for field, unfortunately, a little delayed. We planned to provide electricity in December, most likely this will not happen. USC now mobilized, but those 65 days that were lost, they were reduced only to 45. That is, at the end of January we will provide the electricity,” he said.

Thus, drilling can be commenced in February. While Alekperov explained that the well field is more simple, you can drill faster. “We hope that the drilling will be much faster, due to this, we compensate. We have three wells to run the field, if people start drilling in April-may we will run,” said Alekperov.

Prospects in Mexico and Turkey

Alekperov noted that LUKOIL interested in partnership with Chevron to participate in tenders for heavy oil in Mexico. “We would very much like to be partners in heavy oil in Mexico. Pemex supports this intention,” said he.

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According to him, currently the companies close contact. “We hope that we can come to an understanding, there is interest in projects in other countries,” he said.

Alekperov also said that LUKOIL, which owns a network of filling stations in Turkey, until one feels the drop in sales.

“We are constantly monitoring the situation until we feel the fall in sales. We have a well structured business, we are the largest supplier of diesel fuel to Turkey. I hope that the relationship will continue”, – he said.

Return to part of the Anaran

In addition, LUKOIL is offering Iran the rehabilitation of a number of large fields in the late stage of operation. “We have sent the draft of the second agreement for the purpose of studying a number of large fields that are interesting from the point of view of rehabilitation. Our experience will allow us to bring new life to these fields,” he said, adding that this field of “seven” major.

Alekperov said that in the next year expires the first agreement to study several provinces, including in the North of the Persian Gulf and in the area of the part of the Anaran field.

“We are interested in return on the part of the Anaran objects”, – said the head of “LUKOIL”.

Alekperov also noted that the contracts prepared by Iran to foreign investors, should be more attractive.

“Service contracts in Iraq have shown that they can work, but with the high price of oil. At the low price of service contracts mutually negative for both the investor and the state, and the PSA enables the investor market to raise money and the state to get its share,” he explained.

“While there is a discussion, not the final result. We understand the complexities, but I hope that by February we will understand the essence of the contracts”, – said the head of the company.

In his opinion, some of the oil fields of Iran will be put up for tenders and direct negotiations. LUKOIL expects to participate in both configurations.

Geological exploration on the Taimyr Peninsula

“LUKOIL” intends to request to extend the timing of exploration work (IRT) in Eastern Taimyr area, as due to the litigation with Rosneft, missed the season.

“We have lost this season, failed due to the fact that there were court proceedings, to mobilize the seismic crew. For the year, we believe the government needs us to extend the exploration period on the license, because (this happened approx. ed) not for our cause,” said Alekperov.