Lukoil Plans to Take Part in Developing Russia’s Arctic, Far East Shelves

MOSCOW. Oct 16 (Interfax) – Lukoil plans to play an active role in developing Russia’s Arctic and Far East shelves, particularly given its experience in offshore projects in the Baltic and Caspian regions.

Lukoil President Vagit Alekperov made the statement in an address to students at Columbia University in New York on October 15.

Peak production is unlikely to take place in the next few decades, but the share of so-called costly crude oil (offshore, high- viscosity and oil produced from gas and coal) will increase, Alekperov said, according to a Lukoil press release. Only continental shelf fields can ensure a tangible increase in production. This is the reason why Russia is involved in the delimitation of the Arctic shelf and is establishing international consortia for its development, he said.

Lukoil’s Strategic Development Program provides for considerable growth of key performance and financial indicators. Over the next decade the share of gas in Lukoil’s overall production will rise from 10% to 30%. Its foreign subsidiaries will account for one- fifth of production and half of refining, the press release says.

Besides Russia, the key role in development of production activities of the Lukoil group will be played by the Caspian region, the Middle East, Africa and Latin America. The company also intends to strengthen its positions on the mainstream markets of Europe, Asia-Pacific region and North America, the press release says.

The next step will be organization of direct supplies of Russian oil to the U.S. At present, Lukoil is completing construction of a unique transportation system in the north of Russia, which will allow it to supply up to 240,000 barrels of oil to the U.S. daily, the press release says.

Lukoil can also deliver oil to the U.S. from its Latin America fields. A trial oil consignment (from Condor field in Colombia) was exported to the U.S. earlier this year. In addition, the company continues the appraisal of heavy-oil fields in Venezuela, the press release says.

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