Lukoil aims for boost at Arctic assets

Lukoil is over the next two years likely to significantly increase oil shipments from its Varandey terminal on the Pechora Sea coast.

The oil company intends to increase production in the Timan-Pechora province by 30 percent over the next two years.

Northern Russia will be a key priority for the privately own company in the period 2014-2016. A total of $2 billion is to be invested in field development in the Timan-Pechora province in the period, company representatives told an audience of investors this week. Production is to increase by 30 percent, reports.

Lukoil is a key company in the area, which includes the oil resources of the Komi Republic and the Nenets Autonomous Okrug. In 2008, the company opened its unique Varandey terminal on the Nenets coast, and this object is a strategically vital part of the company’s expansion plans in the area. The terminal is connected with pipelines linking up the major Yuzhno-Khilchuyu field. Several more fields are expected to get connected with this pipeline grid, thus enabling the company to boost out-shipments from Varandey.

As previously reported, the oil shipments from Varandey have over the past years dropped significantly following lower production at the Yuzhno-Khilchuyu.

According to company representatives, production in the Timan-Pechora Province will over the next two years increase from 280,000 to 350,000 barrels per day.

The total investment program of the company in the two-year period amounts to $51 billion, of which $18 billion is to be spent in foreign projects. Some of that money is likely to be spent in northern Norwegian waters, were the company is among the licenseholders in the 22nd Norwegian License Round.