OAO Lukoil, the Russian oil company with the most assets overseas, said Iraq asked it to cut its production target at the West Qurna-2 project by 33 percent.
Lukoil will aim for peak output of 1.2 million barrels a day in 2017 rather than 1.8 million barrels a day at the request of the Iraqi government, Andrei Kuzyaev, head of Lukoil Overseas, said on Russian state television in comments confirmed by Grigory Volchek, a company spokesman.
Iraq, a member of the Organization of Petroleum Exporting Countries, or OPEC, is currently not assigned allocations or quotas for its oil output as the war-torn middle eastern nation attempts an economic recovery.
The Iraqi request is related to infrastructure issues and a nationwide reduction in planned output, Kuzyaev said, without elaborating.
Lower output targets mean Lukoil will have a better chance of reaching the production levels that trigger compensation payments, said Alexei Kokin, an oil and gas analyst at UralSib Financial Corp. in Moscow, in a research note today.
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