Lukoil aims higher production in 2011 despite declines

MOSCOW, RUSSIA (Commodity Online) : Russian private oil company Lukoil aims to increase exploration in the coming years after posting modest production declines in 2010, the company said.

Lukoil produced 1.7 percent less oil in 2010 than it did the previous year because of declining reserves in West Siberia.

Lukoil President Vagit Alekperov said Friday that his company was keen to reverse that result in the coming years.

"The company faced a lack of resources for further development and a decline of active drilled reserves," he was quoted by Russia's state-run news agency RIA Novosti as saying. "As a result, we'll have to increase resources by means of geological exploration and a higher oil extraction ratio at open fields and faster conversion of resources into proven reserves."

He said output could increase in the coming years as the company focuses its revenue stream on projects in the Caspian Sea and Iraq, where Lukoil landed a lucrative deal to tap into Iraq's West Qurna-2 oil field.

Natural gas production in 2010 was 12 percent more for Lukoil than the previous year. Alekperov said overall hydrocarbon production would increase by 4 percent during the next few years.