* Sees peak production of 1.2 mln bpd not 1.8 mln bpd
* Sees next year's investments in Iraq at $5 bln
* Wants to cut share in West Qurna-2 oilfield
MOSCOW, Dec 27 (Reuters) - Russia's second-largest crude
producer LUKOIL said it has cut its oil production
plan in Iraq by almost a third, in line with the local
government's plans to increase the lifetime of its oilfields.
Andrei Kuzyayev, head of LUKOIL Overseas, told Russian state
TV channel Rossiya-24 in an interview aired on Wednesday that
LUKOIL is now looking for peak production at the West Qurna-2
oilfield of 1.2 million barrels per day (bpd), not 1.8 million
bpd as previously envisaged.
West Qurna-2 is the world's second-largest undeveloped field
with recoverable oil reserves of around 14 billion barrels,
according to LUKOIL.
Kuzyayev said the Iraqi government has decided to cut peak
oil production in order to prop up oil prices and help its
economy.
"That's why Iraq's leadership has decided to limit
production in the whole country to 9 million bpd, not 12 million
bpd," he said.
"The Iraqis have analysed the situation for the last three
years, and they come to the conclusion they didn't need (sharp
rises in) peak production," Kuzyayev added. "That's because the
peak production will lead to creation of excessive
infrastructure. And going forward, when production will start to
sharply decline that would create an unstable macroeconomic
situation in Iraq.
Iraq has signed a series of contracts with foreign companies
that target total oil production capacity of 12 million bpd by
2017, but has been reviewing the target.
"In return (for cuts) we got a substantial increase in the
lifetime of the plateau production. The plateau output has been
envisaged to last 12-13 years, while now it has been revised to
19 years," Kuzyayev said.
Any deep cut to Iraq's overall target could mean the deals
could need to be adjusted to accommodate lower production
plateaus, or peak output levels, which would mean lower returns
for oil companies in the short term.
Oil output in 2013 was targeted to reach an average 3.7
million bpd - just shy of an all-time high of 3.8 million, hit
in 1979. Exports are expected to run at 2.9 million bpd,
including 250,000 bpd contributed by the northern Kurdistan
Regional Government (KRG).
WEST QURNA
LUKOIL controls 75 percent in Iraq's huge West Qurna-2
oilfield and has been looking for a partner to replace Statoil
which decided to leave the project earlier this year,
but has declined to name any candidates.
The deposit alone is expected to produce 500,000 barrels per
day in 2014. LUKOIL plans to invest some $5 billion in
development of the field next year, while total investments for
the whole period of the project are seen at $30 billion.
Kuzyayev said the company would be happy to sell the share
left from Statoil it currently owns to an Asian company as it
needs to secure stable market for its oil.
"We are forced to find a strategic partner, first of all, on
the markets which are slated for growth. These are the markets
of China, India and South-East Asia," he said.