Lukoil Board Reviews 2017-19 Budget

Russia’s Lukoil held a board meeting November 22 in Moscow at which it reviewed its 2017-19 budget and key trends in the energy industry out to 2030.

Its budget assumes a “conservative” forecast of $40/bbl Brent oil in 2017, but nonetheless envisages “active development” of Lukoil’s upstream segment, which will account for more than 80% capex.

It plans to boost production from 2016 levels by “increasing gas production in Russia and Uzbekistan” as well as ramping up the Filanovsky (offshore Caspian) and onshore Pyakyakhinskoe (Yamal-Nenets area, western Siberia) oilfields to plateau. Pilot production began on both in 3Q 2016. Production would also be increased in West Siberia, plus there would be increased advanced drilling and wellwork, more heavy crude development  of Timan-Pechora, and other projects.

Russian PM Dmitry Medvedev (left) with Lukoil president Vagit Alekperov, in 2008 whilst Medvedev was Russian President (Photo credit: Lukoil)

Four days ago, Lukoil reported oil production for 3Q and 9M2016 of 1.78mn b/d and 1.85mn b/d respectively, the latter up 7%. Oil from its share in Iraq’s West Qurna-2 in the 9M period fell from some 10% last year to about 6.5% of its total this year.

Lukoil’s marketable gas production for 3Q and 9M 2016 were 4.7bn m³ and 15.2bn m³ respectively, the latter up 2% year on year helped by developments in Kazakhstan, Azerbaijan and Uzbekistan.

Russian prime minister Dmitry Medvedev meanwhile congratulated the company on its 25th anniversary on November 22, saying Lukoil represented “excellent quality, reliability and stability.”

Mark Smedley