T h e w orld of LU KOIL’s intern ation al upstr eam pr oj e c ts

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With West Qurna-2 launched, mobility forms the nucleus

of LUKOIL Overseas’ corporate culture 4-5

The way we were

The day after the mammoth oil field in Iraq commenced operations, staff were hailed by senior management 3

wesT qurNa-2 award ceremony recognises project efforts

LUKOIL veteran Valery Balashov reminisces about working in Iraq during the 1980s 7 V

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On the moveOn the move

“ Oil wells are like finger-prints,” a wincing Grig-ory Maltsev, LUKOIL Overseas’ Drilling Man-

ager, explained to visiting journalists in the midday sun, gesturing to the 100-metre tall derrick at West Qurna-2’s well pad cluster 6. “Each one is unique.” After explaining at length the complexities of extracting and safely transporting oil in the environmental extremes of Basra, Maltsev went on to share that LUKOIL is currently the only company using a cluster-based approach to drilling wells in Southern Iraq.

Those words were echoed later that Sat-urday, March 29, at the official launch cer-emony of early oil at West Qurna-2’s Mishrif

formation. Russian Deputy Prime Minister Arkady Dvorkovich, his Iraqi counterpart Hussain Al Shahristani and LUKOIL Group President Vagit Alekperov were all on hand to push the launch button in the giant white

tent erected especially for the ceremony outside the Central Processing Facility. The hundreds of attendees included LUKOIL workers who had been labouring on the pro-ject for years, subcontractors, local govern-

ment officials and members of the military.

Energy marketsAbdul Karim Luaibi, Iraq’s Minister of Oil,

called the “record time” launch a “historical accomplishment,” referring to West Qur-na-2’s Central Processing Facility as the larg-est such object in Iraq. The oil field, Iraq’s second-largest, began pumping an initial 120,000 barrels of oil per day and is expected to hit 400,000 per day by the year’s end.

After the Yamama formation comes on-line, the field will eventually reach a maxi-mum output target of 1.2 million barrels per day in 2019. Iraq’s current daily oil produc-tion totals 3.6 million barrels. The move will also help OPEC meet its ambitious target of increasing oil production by a million bar-rels this year. “From today, this project be-comes an important factor in world energy markets,” said Alekperov.

History of cooperation“This marks a new level of coopera-

tion with Russian companies based on 50 years of shared history,” Luabi said. “Many thought it would be impossible to complete this project on schedule because of the se-curity and political situations,” added Al Shahristani. “LUKOIL was one of the few companies that accepted the challenge.”

The launch also allows LUKOIL to begin receiving returns on its initial investment of $5 billion. “LUKOIL is actively solving some of the region’s most pressing problems. We believe in a prosperous, rich Iraq. We want to be part of this process,” said Alekperov.

Dvorkovich pointed out that thousands of Iraqis are studying at Russia’s universities. “We welcome more, and we hope that West Qurna-2 is only Russia’s first project on this site in Iraq. I’m talking about electric power stations, infrastructure and other forms of cooperation,” he said.

LUKOIL Overseas President reiterated this by revealing that the company had be-gun seismic testing on the nearby Block 10, hoping for a long-term “synergy” between the projects (see p. 3).

Operations a go Iraqi Minister of Oil Abdul Karim Luaibi, Iraqi Deputy Prime Minister for Energy Affairs Dr. Hussain Al-Shahristani, Russian Deputy Prime Minister Arkady Dvorkovich and LUKOIL President Vagit Alekperov (right to left) launch early production

LUKOILlaunches early oil production at West Qurna-2 to fanfare

In their own words

“LUKOIL is actively solving one of the region’s most pressing

problems. From today this project becomes an important factor in world energy markets.”Vagit Alekperov, President, LUKOIL Group

“We brought together the best Iraqi and Russian oilers in

the world in record time, 40 per cent faster than the world average for such a project. We have a right to be proud of this.”Andrei Kuzyaev, President, LUKOIL Overseas

“Iraq’s people must share in the wealth of West Qurna-2. When

we started, many international com-panies doubted we could complete such a large construction project in such a timeframe. LUKOIL was one of the few companies that accepted the challenge.”Hussain Al Shahristani, Iraqi Deputy Prime Minister

“We hope that West Qurna-2 is only Russia’s first project

on this site in Iraq. I’m talking about electric power stations, infrastruc-ture and other forms of cooperation. We’ll support our companies work-ing here.”Arkady Dvorkovich, Russian Deputy Prime Minister

The company celebrates

its latest contribution to

global energy markets

and Iraq’s future

Special effort LUKOIL’s entire West Qurna-2 staff were commended at an award ceremony the day after the launch of early production

January 2012 March 2014

LUKOIL launches seismic tests at Iraq’s block 10As part of its ongoing commitment to Iraq, LUKOIL Overseas has begun a 2D seismic survey in Southern Iraq’s Block 10 oilfield, located 120 kilometres west of Basra (and not far from the recently-launched West Qurna-2 field). The Mandatory Geologic Exploration Programme at Block 10 is scheduled to take five years with a potential two-year extension and includes drilling one exploration well in addition to the 2D seismic survey.

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The governor of Muthanna province, Ibrahim Majali, announced the fol-lowing on the official site of Muth-anna province: “Today we met with

the delegation from the Russian company LUKOIL, representatives from South Oil Com-pany, and the Department of Mine Clearance in order to analyse the work stages of Block 10.” He emphasised that the province will fully support the project.

He also said that the area of this block is 5,600 sq. km, 67 per cent of which is in Muth-anna province with the remaining 33 per cent in the Dhi Qar province.

He mentioned that the two-company con-sortium is starting seismic exploration in Block 10. Mines and unexploded munitions have been already cleared from the territory

in cooperation with the relevant departments and agencies. Upon completion of seismic exploration, the next step will be to select a company to drill exploratory wells to assess the oil reserves.

The governor said, “The Oil Ministry signed a contract with a consortium consisting of the Russian company Bashneft and the Brit-ish company Premier Oil to develop Block 12 in Muthanna and Najaf provinces,” and men-tioned that “the area of this block is 9,020 sq. km, 6,550 sq. km of which are within Muthanna province and 2,470 sq. km of which are within Najaf province.

“We hope that as a result of the work car-ried out in these geological exploration blocks, the oil reserves found in the next few years will have a positive effect on the petrodollar rev-enue of the province for developing its local labour and economic welfare — owing to the work of these companies,” Majali expressed.

Muthanna governor pleased with exploration efforts

Provincial pride Ibrahim Majali, Governor of Muthanna province (sixth from left), believes petrodollar revenue coming into the province in the near-future will hugely boost the local economy

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LUKOIL Group optimises Kazakhstan assetsLUKOIL Group President Vagit Alekperov signed an agreement this month that paves the way for LUKOIL to sell its 50% stake in Caspian Investment Resources to China’s Sinopec for around $1.2 billion. Caspian Investment Resources owns stakes in four hydrocarbon production projects in Kazakhstan. The President said LUKOIL will focus on exploration in the Kazakh sector of the Caspian sea.

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The day after the official launch ceremo-ny, LUKOIL utilised the same venue to hand out awards to the entire staff of West Qurna-2. Andrei Kuzyaev described West Qurna-2 as “the largest on-land greenfield project in the world” and “the biggest pro-ject by a Russian company abroad since the fall of the USSR” and present awards to key members of his team.

Kuzyaev referred to Sergei Nikiforov, Senior VP of LUKOIL Overseas (see Inter-view, p. 3, Oil Journal, March 2014), as “the guy who was able to unite all of us to real-ize this dream” and thank Ivan Beltyukov, VP for Procurements and contracts, for “bringing thousands of tons of cargo into Iraq.”

“One of the reasons this field wasn’t developed for so long after being discov-ered in 1973 is because the government and businesses weren’t able to engage in a constructive dialogue with the local pop-ulation,” said Kuzyaev at the ceremony. “Kirill Smolyakov and his team did that,” he added before presenting a commemora-tive trophy to West Qurna-2’s Director for External Affairs.

“Before we had a dream. Now we have a dream team,” concluded Kuzyaev.

Editor-in-Chief: Artem ZagorodnovEmail: oiljournal@lukoil-overseas.comAddress: LUKOIL Overseas Service BV, Dubai Properties Group Building, TECOM, DubaiWebsite: lukoil-overseas.com (digital version)Publishing Director: James HewesEditor: Anshuman JoshiDeputy Editor: Eduan R. MaggoPages Editor: Priya MathewSub Editor: Riaz NaqviDesign Editor: Biplob RoyDeputy Design Editor: Nicholas D’SouzaDesigner : Pranith Ratheesan

Published and printed by Al Nisr Publishing LLC. Private circulation only

Oil Journal is LUKOIL Overseas’ official

English-language monthly newsletter.

Questions? Comments? Let us hear your voice!oiljournal@lukoil-overseas.com

Credit to them allFollowing the launch of early oil production at West Qurna-2, staff were awarded at a special ceremony

Awarding progress Members of the team responsible for delivery of the West Qurna-2 project were recognised at a March 30 ceremony

Dubai rewarded Staff at LUKOIL Overseas headquarters also received awards following the launch

3BusinessInsight

4SpecialReport

LUKOIL commits $170 million to researchLast month, LUKOIL’s Management Committee approved LUKOIL Group’s 2014 Annual Research and Technology Programme. It will fund over 1,000 projects across five directions: R&D and technology, oil and gas field development and operations, geological exploration, raw material base appraisal, functional R&D work and services.

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Alexander Cornelius brought with him over 25 years of experience from Chevron Corporation when he joined LUKOIL Overseas as

Adviser to the President last year. Cornelius tells Oil Journal what makes LUKOIL Over-seas’ corporate culture unique and why em-ployees can’t hide from postings abroad.

How would you describe LUKOIL Over-seas’ corporate culture?I recently had the privilege of attending the fifth LUKOIL Overseas Scientific and Technical Conference for young specialists. I sense optimism. I see a youthful spirit, a can-do attitude that’s all part of the LUKOIL Overseas corporate culture. We’ve got a bunch of great young folk working here. It’s

going to be a challenge for management to accommodate the influx of young, diverse thinkers who are the future of the company. They think different; this affects the culture.

I remember from my many years at Chev-ron, when it was transforming itself from a mainly US-centred downstream refining company into a vertically-integrated inter-

national corporation, all of the changes they had to go through to ensure a successful tran-sition. They had to change the way they treat people, the way they pay people, the way they move people around, the speed with which they have to make decisions and the precision that they require to get predictabil-ity with the outcome of projects. This took years. I see LUKOIL, which has perfected its operations in Russia, going through these same processes and changes as it comes out more into the international arena.

So to answer your question, I see hard work, a can-do attitude, and optimism. But I also see silo working, few decision makers, some fear and a need to change to accom-modate new situations.

What values does the company promote?If I was recruiting a young man from univer-sity I’d tell him about the great opportu-nities here as part of a can-do team, a team where people are able to work beyond their experience. But I’d hon-estly say that they should expect to work long, difficult hours. If the young people at the confer-ence were any representation of what’s coming, they will help develop a culture where per-suasion will replace dictated orders and cooperation will replace competition.

I hear leaders talking about “one team”, coopera-tion and partnership. Our performance will be enhanced by promoting such values.

What are the most ef-fective tools for pro-moting a set of val-ues?The most important thing to me in setting culture and determining values in an organisation is how the senior leader-ship behaves. If they en-courage openness, challenge

and asking questions in an unthreatening way, that’s what they’re going to get. Senior leaders create and sustain the culture.

I’ll never forget the Congressional hearing in the US after the oil spill in the Gulf of Mexico. A number of industry leaders were summoned to talk about if this could happen in their com-panies. John Watson was the new chairman of Chevron at the time. He said, “Of course this could happen to us. But the chances are maybe less for one important reason: we have “stop work authority” for everyone in our company. We employ 65,000 people, have 200,000 con-tractors and every one of them has my per-mission to stop the work anytime, any day to say ‘Wait a minute, this doesn’t look right’ and cause a discussion.”

That is part of the culture in that company. Do you think the chances of a catastrophe are less because of that? I would contend yes. Do you think the chances of an enhanced per-

formance are better in a culture like that? I would contend yes. That’s a case where cul-ture directly affects performance.

What steps has LUKOIL Overseas taken to promote these values among its geo-

graphically diverse employees?I’m delighted to tell you the senior

leaders here recognise a number of very important things: that we’re

moving internationally and that we’re engaging a diver-sity of people and talent. The initiative that Inna Gubareva and others have set up to look at what our corporate culture is and what we’d like it to be is very exciting.

There are important things about LUKOIL

Overseas corporate culture that we need

to keep: hard work, optimism and a can-do attitude.

What are the biggest challeng-es to effective

teambuilding within the company?In a regatta, if one of the rowers has his oar in the water at the wrong time, the entire boat slows down. We need to learn to work togeth-er as a team if we’re going to get some of the performance that we want to show the world. Teams and team-building and enterprise-think are all very important. To be “one team” there has to be an element of self-sacrifice for the good of the team. This is a particular challenge

Mobility pulls you up the ladder

HIS STORY

Cornelius, a native of Scotland, joined Chevron Corporation

in 1982 and held a number of engi-neering and management positions before becoming VP for Chevron Overseas Petroleum in 2001 fol-lowing a stint in Kazakhstan. He returned to Kazakhstan in 2003 as General Director of Tengizchevroil. In 2006 he became VP of Operations for Chevron’s Global Refining Sys-tem, and in 2009 became VP for Op-erational Excellence and Projects, where he oversaw capital projects and provided support services for operational excellence processes such as safety, reliability and energy efficiency. He joined LUKOIL Over-seas in June 2013.

“In Chevron it is mandatory

to have Angolan, Nigerian,

Venezuelan, Indonesian,

or Kazakh experience to

be able to climb the career

ladder. I have no doubt that

future leaders in LUKOIL

will have worked in Iraq and

Uzbekistan at some point in

their careers.”

Alexander Cornelius, Adviser to the President, LUKOIL Overseas

Armed with 25 years of industry experience, Alexander Cornelius, Adviser to the President, shares wisened tips on how to get ahead in the highly competitive oil and gas industry

Production on schedule LUKOIL began Phase One (Early Oil Mishrif) of the West Qurna-2 project at the end of March. The project will last through 2034

Those who have taken the plunge say…

for those who have been brought up in a sur-vival of the fittest, winner-takes-all, competi-tive environment.

All of this is inside this changing culture that we have in LUKOIL Overseas. I think this com-pany has all the elements to be great. We’ve got individuals here that are as smart as anybody that I’ve ever come across. I’m pleased to be part of this. But we need to be clever about how we orchestrate it. We need all oars in the water together, in sync.

How important is mobility to LUKOIL Overseas’ corporate culture, and how could employees use the upcoming oppor-tunities in Iraq to their advantage?If we are to be the international oil and gas company we aspire to be, our employees must be willing to go where the work is. Those who are willing to be mobile will be part of the team and have challenging careers. Those who are not will have short careers with limited growth. This willingness to be mobile is very impor-tant as today the work moves from Home of-fice to Project Design offices, fabrication yards and construction sites across the world.

Of course there is some self-sacrifice re-quired. Rotational assignments are hard on the family; some locations are have limited school-ing, goods and services. A career in an interna-tional oil and gas company is not for everyone. But the rewards are many. A fulfilling career; meeting many diverse kinds of people; see the world; opportunities for job and career growth.

In most oil and gas companies, employees are recognised for their willingness to be mo-bile. Apart from the career opportunities, there are Foreign Service premiums (to recognise hardship locations); and Goods and Services allowances (to recognise you just can’t get stuff that you expect at home); assistance with qual-ity education for children; and more.

Again in most large oil and gas companies, the senior leaders have experience in major foreign projects. In Chevron it is mandatory to have Angolan, Nigerian, Venezuelan, Indo-nesian, and/or Kazakh experience to be able to climb the career ladder. I have no doubt that future leaders in LUKOIL will have worked in Iraq and Uzbekistan at some point.

When LUKOIL Overseas relocated its corporate headquarters to Dubai last year, fewer than six

percent of employees chose to leave the company rather than relocate. The overwhelming majority accepted the challenge of moving to Dubai. Our international consultants were so impressed by how smoothly the transition went they said our case should be included as an example in business textbooks.

This was because we understand – like nobody else – that mobility is a key feature of any major internation-al company. Mobility has changed our mentality and approach to work; it’s made us more flexible and adapt-able to change, whatever form that may take.

The move to Dubai was only the first step among the many changes coming to LUKOIL Overseas and its corporate culture. Every year our company becomes more interna-tional as personnel from different nationalities and backgrounds swell in our ranks. We are in the process of forming a corporate culture that will facilitate a constructive cohesion of these diverse team members.

There’s no better example to il-lustrate this mobility and geocentric approach to business than the re-cent launch of early oil production at West Qurna-2. Today our already international team has the oppor-tunity to hone its skills and profes-sionally develop by taking advantage of the positions opening up in Iraq. As we say at LUKOIL: always moving forward!

— Inna Gubareva Head of HR and Organisation Development

As LUKOIL Overseas staff know all too well, mobility is a central tenet of the company’s corporate culture. After the launch of oil production at West Qurna-2, more than 500 vacancies are opening up for personnel in Iraq

“West Qurna-2 provides the op-portunity to see the fruits of

my labour clearly. There is also the opportunity for self-fulfilment and professional, intellectual and crea-tive growth. I’m proud to contribute towards the wellbeing of the region where we operate.”Eduard DanilyantsDeputy Branch Manager for Operations

“By the nature of our profession, we surveyors are an unpreten-

tious bunch. Most of us have had a rich experience living in tents, tundra and temporary housing. That’s the profes-sional path we’ve chosen. Based on my past experience, I can confidently say that LUKOIL Overseas has done eve-rything to make employees in the field comfortable.”Denis ChernyavskiySurveyor Superintendent

“I’ve been working on a rotational basis for 12 years for leading inter-

national energy companies. At West Qurna-2 I was impressed by how well the accommodations, meals and ser-vice were organised.”Vladimir BudkoArea Construction Manager

I discovered that I really like to work on a rotational basis directly at the

site. I get to work with some of the best specialists from the entire for-mer Soviet Union and the equipment is state-of-the-art. Plus the off-duty schedule allows me to visit my friends and family wherever they may be. I like working in Iraq very much.”Leila RatiashviliHead of Chemical Analysis Laboratory

You may have noticed posters around the office calling for volunteers interested in being transferred to Iraq

The roads we tread

Questions? Comments? Let us hear your voice! Write to oiljournal@lukoil-overseas.com

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It was no surprise that LUKOIL’s deci-sion to begin exploratory drilling re-ceived a lot of attention at this month’s Ghana Oil & Gas Summit 2014, which

happened to coincide with operational and technical committee meetings of the Cape Three Points Deep Water (CTPDW) bloc. This year’s summit featured 270 official del-egates and numerous guests, many of whom were eager to congratulate our delegation with the consistency of our professional commitment to exploring offshore oil and gas deposits in the Ghana shelf.

Strategic movesLUKOIL first came to these waters in

2006, when it began its offshore geologi-cal exploration in West Africa. By 2012 it was not only the majority owner (56.55%) of the CTPDW bloc, but also the project’s official operator along with partners PanA-tlantic (formerly Vanco) from the US and the Ghana National Petroleum Corporation (15%). Its upcoming exploratory drilling

will focus on the southwest portion of the 5,142-square-kilometre CTPDW bloc.

The geological structure to be drilled is known as Lynx, after the feline species oc-cupying parts of the US-Canada border. Nearby reservoirs that have already been drilled carry similar names — Dzata and Cheetah. The Lion and Leopard reservoirs, having been drilled in 2010 and 2011, were a disappointment from a commercial hydro-carbon perspective. LUKOIL is counting on better luck with the Lynx.

The exploratory campaign at the CT-PDW bloc is on par logistically with sig-nificant projects in the Ghana oil and gas sector this year such as Anglo-Irish Tullow Oil’s acquiring of the Tweneboa, Enyera and Ntomme (TEN) reservoir, the delayed Atu-abo gas project and Eni’s Sankofa offshore gas field.

“I’m very happy about our joint decision,” says Petroleum Commission Chief Executive Theo Ahwireng. “I congratulate LUKOIL with its firmness, reliable approach to the

project and not letting obstacles deter the company. Our deep waters are a difficult un-dertaking even for the most experienced oil workers, but the potential rewards are vast. But you have earned them with all the time, energy and resources that you’ve spent at the

CTPDW. We — the people of Ghana — value this very much. We wish you success in in-terpreting the data you will receive. May its analysis be thorough and comprehensive — that’s the most important thing.”

— By Pavel Bogomolov

Going into Ghana

IndustryVoices

ALASKA (US)

PACIFIC OCEAN

ATLANTIC OCEAN

Beaufort Sea

Gulf of Alaska

Denmark Strait

GreenlandSea

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Bering Sea

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Svalbard(Norway)

Franz Josef land(Russia)

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NORTH POLE

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ARCTIC OCEAN

NORWAYICELAND

Resolute

Nanisivik

Ellesmere Island(Canada)

The icing on the cake

As one of ten Ghanaian LUKOIL scholars at Gubkin University, I am incredibly lucky to visit the Norwegian city of Bodø at the

invitation of the local university where the Arctic Dialog 2014 international conference has taken place for years.

On the second day of the Arctic Region in the Global Prospect — Resources discus-sion, the forum named three transnational oil companies that have demonstrated the most flawless, well-thought-out strategy for studying and developing hydrocarbon reserves in the Arctic Circle with a high de-gree of environmental responsibility. This triumvirate were Statoil, Chevron and LU-KOIL.

According to local industry, academic and university experts placed this group of winners ahead of the likes of ExxonMobil, Shell and Total. Despite their vast financial and technical resources and achievements, perhaps their work is less accurate and fo-cused? Or maybe the Arctic history of some power giants is a work record of their some-times harmful environmental impact?

Consistency rewardsAccording to the administrative director of

ENI-Norge, Andrea Forzoni, Statoil has shown enviable consistency in dealing with leaks

and oil spills at deep-water drilling rigs, while also developing modern automated systems to prevent them. These are, in particular, the strict guidelines of Statoil and ENI-Norge for joint development of Goliath offshore depos-its with the support of the Oslo government.

Against the backdrop of increased inter-national tension, the Bodø forum demon-strated an enviable balance and neutrality of geopolitical opinions. It was a good ex-ample of distancing ourselves from danger-ous attempts to make the Arctic Circle an arena of new confrontation. A number of people spoke in favour of easing the compe-tition between investors from the northern countries, as well as for free access for po-tential partners from countries that are far away but also very interested in Arctic coop-eration.

The President of Iceland, Olafur Ragnar Grimsson, spoke on this subject very clear-ly: “Given the scope and characteristics of the resources in the high polar latitudes,” he said, “our region has gained significant geopolitical and geo-economic importance. This relates not only to the countries of the Arctic Ocean, which are Norway, Russia, Greenland, Canada, the US and Iceland, but also to other players. India, China, South Korea, and the European Union also have their own interests here.”

LUKOIL was named among the top three oil companies developing hydrocarbon reserves in the Arctic at a conference in wintery Bodø, Norway

B y R i v e R s o n o p p o n g

Billion barrels of oil equivalent

Oil and gas resource potential

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Source: Wood Mackenzie

Entertainment at the Ghana Oil & Gas Summit 2014 in Accra

LUKOIL scholar meets Iceland presidentRiverson Oppong, a LUKOIL scholar at Moscow’s prestigious Gubkin State University of Oil and Gas, participated in the Arctic Dialog 2014 international conference in Bodø, Norway (see story below). As part of this endeavor, he met with Olafur Ragnar Grimsson, President of Iceland, who called on Arctic and non-Arctic countries to unite their efforts in developing the region. LU

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Valery Balashov knows about leaving home to go work on an oil field in the Iraqi desert – he first tried it 25 years ago as a design supervisor at

Zarubezhneft, the Soviet company chartered in 1967 to develop oil and gas projects outside the country’s territory. Zarubezhneft constructed – among other projects – the water injection plants BP’s workers are currently utilising at the North Rumaila oilfield.

Balashov remembers the time spent in Iraq between 1989 and 1991 fondly, and the relations as more than amiable. “It was my first time in the Middle East, and I’ll never forget arriving in the summer to feel the first heat blast as I left Baghdad’s air-conditioned terminal.”

“The Iraqis were very friendly to Russians. Soviet quality standards in this field had a great reputation, which meant that we worked in an atmosphere of complete trust. Your word was as good as any contract,” he recalls. “Very few of us spoke any Arabic or English. The in-terpreters were busy.”

Living conditions, however, were modest by modern standards. “Six people lived in a single housing unit with a kitchen,” Balashov explains. After several weeks on-site, many workers got tired of the canteen and ventured out to buy food for preparation.

The entire base was surrounded by a sand wall with barbed wire on top, with a single

guarded point of entry. “Security wasn’t as big of an issue then; some of the elite specialists were allowed to bring their families. We would go exploring the area in a bus on Fridays.”

“One time we were laying pipelines near where West Qurna-2 is being developed now,” he continues. “We bought palm trees from the local villagers for 300 dinars each and planted them at our base to make it more comfortable.”

“Overall it was a great opportunity to expe-rience a foreign country and discover its cul-tural heritage,” says Balashov. “The worst part was contacting home – there was no email, Skype, internet, TV or even radio at the base. Mail arrived once a week.” And forget shifts – the personnel worked six months for every month of vacation they received.

All in all, Soviet economic and technical assistance brought to Iraq full development of the North Rumaila, Lukeis and Nahr Ben Umr fields; water injection facilities at North Rumaila, initial development at West Qurna; a number of other wells drilled in Southern Iraq; hydro plants in Al Kadissiya (670 megawatts) and Dokan (400,000 kilowatts); the Al Bagdadi dam (400 megawatts); a thermal power plant at Nasiriya (750,000 kilowatts); an electrical equipment factory in Baghdad; an agricultural machinery factory in Iskandariya; and hun-dreds of other projects.

“It was sad to leave in 1991,” he concludes. “The Gulf War was starting and Iraq faced a very uncertain future.” Today, along with LU-KOIL, more Russian companies are returning to the country. Gazpromneft, is increasingly active in Iraq. Several projects in electricity and trans-port are gaining momentum. “I’m very happy for the chance to return to Iraq as part of LU-KOIL’s team and finish the work started by So-viet specialists at West Qurna-2,” says Balashov.

The way it was

B y D e n i s T aT l i e v

Long before West Qurna-2 was developed, Soviet engineers and specialists were busy building in Iraq

Last month, Russia’s Perm State Research University held LU-KOIL Overseas Day as part of a scientific congress called The

Russian and Global Oil and Gas Economy: Challenges and Prospects. The company teamed up with Changellenge, a leading case study developer in Russia, to create a business game for students called the LUKOIL Overseas Long-Term Develop-ment Strategy as part of the event.

Game for businessAbout 400 applications were received from 13 cities and 34 Russian universi-ties. Based on the selection results, about 50 students delivered their reports di-rectly at the conference, 30 students sent their articles for the Book of Abstracts, and the other attendees competed for first place in the business game. Remarkably, Perm State Research Uni-versity brought together an audience of more than 180 students from the leading regional universities for the event. Aspir-ing young oil and gas professionals came

to the conference from Moscow, Novo-sibirsk, Saint Petersburg, Ufa, Omsk, Tomsk, Tyumen, Samara and other cities.

Representing the futurePerm was represented by both under-graduate and graduate students from Perm State Research University, as well as from Perm National Research Poly-technic University, which also took part in judging the research papers on conference sections that included Geology, Production, Economics and Management.

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Alternative human resources energy

LUKOIL’s experts speak before specialistsFive specialists from LUKOIL presented their findings in geological hydrodynamic modeling, based on the company’s work in Uzbekistan, before experts at an international technical conference last month. It was jointly organised by the Society of Petroleum Engineers and the European Association of Geoscientists and Engineers in Moscow.

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Kuwait’s oil exports to rise by more than a fifth

OPEC’s third-largest producer plans to increase exports by 23% by 2020, announced Kuwait Oil CEO Hashem Hashem. The country will be able to increase exports from 3.25 to 4 million barrels daily via advanced extraction methods. Oil Minister Ali Al-Omair sees no risk of global oversupply due to growing demand, reported Bloomberg.

Traditional players not guaranteed a role in UAE oilfields

Suhail Bin Mohamed Al Mazrouei, Energy Minister of the UAE, announced that while he hopes Western oil firms historically linked to the country’s major oil and gas fields would maintain a role, this was by no means guaranteed when it comes to renewing concessions. “What’s important is that it’s fair to the newcomers as it is to the previous shareholders. This is a lifetime exercise and we have to do it right,” he said, reported Arabianbusiness.com.

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School support

Last month, LUKOIL Overseas ce-mented its long-term commitment

to Iraq at an elaborate opening cere-mony for the Dijla Secondary School for Girls attended by company Presi-dent Andrei Kuzyaev and Saleem Shawqi Abid Ali, Mayor of Hewair. LUKOIL provided the school with 30 AC units for classrooms, modern laboratory equipment for physics, biology and chemistry, outdoor land-scaping, playgrounds, sports fields, toys and tennis sets. “The supplies are very important for improving the quality of education the pupils receive. They allow them to see what they are learning in textbooks, and the playgrounds are second to none,” says Ramadan Ali Hussein, LUKOIL’s local Senior Information-Analytical Support Officer. The school has 650 students from the town of Hewair.

Good ol’ days Valery Balashov (right) stands with a colleague in Basra, 1989

Valery Balashov, now a Design and Expertise Manager at LUKOIL Overseas, feels that work done in previous decades by Soviet engineers paved the way for the success of current projects

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And of course, everyone here is mad about sport. It’s not just skiing and biathlon — we all witnessed the brilliant performance of the Norwegians on the Sochi Olympic ski-track — but also chess. That is why the World Chess Olympics will take place here in August.

Another pride of Tromsø is the Arc-tic University of Norway, which is quite large for such a small city, with 12,500 stu-dents currently studying. In fact, it is a large educational and scientific research centre with institutes, laboratories, start-up centres and its own research fleet that even includes submarines. It is significant that 400 Russian students study here and about 30 Russian postgraduates work here. The university also conducts joint mas-ter classes with Gunkin State University of Oil & Gas, MGIMO (Moscow State Insti-tute of International Relations), Arkhan-gelsk Arctic Academy and Murmansk State University.

Collaborative effortsConsidering the fact that LUKOIL is go-

ing to significantly expand its business in Norway, the company’s management in the country is planning to cooperate with Trom-sø University to help prepare long-term hu-man resources. In addition, the technologies developed by the scientific departments of the university, including their research on the Arctic shelf of Norway, are of great in-terest to the company.

LUKOIL got involved with refining in Nor-way this year when it signed a contract with Tschudi Arctic for oil transhipment through the Norterminal-Stolt Nielsen terminal in Sarnesfjord near North Cape, which is the northernmost point of Europe. Transporta-tion will be carried out by means of three ice-resistant shuttle tankers that will take a circular route from LUKOIL’s Varandei ter-minal to Norway’s Norterminal. The dead-weight of each ship is 70,000 tonnes, and they will dock at Sarnesfjord approximately once every four days.

Photo of the Month

8 LukoiL drills offshore well in West AfricaLUKOIL Overseas has finished drilling an offshore exploration well, Capitaine East-1x, in Côte d’Ivoire. The well penetrated through 140 metres of sandstone from a Turonian formation and confirmed the presence of hydrocarbons, and the well’s target depth exceeds 5,200m. LUKOIL Overseas has been pursuing deepwater drilling in West Africa via eight offshore projects since 2006.

GlobalPerspective

“Taken from the balcony of the apartment I rent here in Dubai Marina, the photo is

representative of the city’s invigorating energy and fluidity of motion, which is reflective of the vibrancy and diversity of life here.”

Winning shot

This photo was taken by Chris Clough, who works as an Editor and Translator in LUKOIL Overseas’ Documentation Sup-port and Translation Department. The trendy Dubai Marina is based just five minutes away from the LUKOIL Overseas head office, just down the road in Dubai Media City.

LUKOIL employees who are handy with a camera are welcome to send any photos snapped in any of the countries we oper-ate in to oiljournal@lukoil-overseas.com.

In Focus

Where to Stay

n The Rica Ishavshotel, starting at $180 per night, is located on a sce-nic waterside location, offering picturesque views of the harbour. The Rica Grand Hotel — which is the city’s oldest — is priced nearly double that. Don’t expect to find any antiques inside; it’s been burnt to the ground twice. Visit-norway.com suggests homestays — living with a family that rents out a spare room — as a great way to learn about the Norwegian way of life.

Where to Eat

n Arctandria Seafood is good for local specialties such as cod, rein-deer, and whale in a fancy setting. There is also Skarven, a less frilly bar and restaurant downstairs.

n Blårock Café has the best beer selection and best burgers in a Hard-Rock-Café-like setting.

LUKOIL Norway

LUKOIL’s offices in Norway are located over a thousand kilom-eters to the southwest of Tromsø in the national capital of Oslo. The office hosts 15 full-time em-ployees and can be reached at Karenslyst alle 4.

LUKOIL, which has just begun to work on the Northern Norway shelf, was one of the main sponsors of the Tromsø festival this year.

The Bolshoi prepared a special gala per-formance that included fragments from its best ballets, such as Sleeping Beauty, Sylph, Spartacus, Corsair, Don Quixote, The Golden Age and Swan Lake. The group was headed by Sergey Filin, Artistic Director of the Bolshoi ballet troupe.

Nordic natureTromsø is a well-known tourist attrac-

tion in Northern Norway, thanks to its gor-geous scenery. This city is situated far be-yond the Arctic Circle at a latitude of 69 degrees (the latitude of Murmansk). The population of the city is not large (90,000 district residents), but it covers more than 2,500 square kilometres and it is located in three separate areas: the islands of Trom-sø and Kvaløya (“Whale Island”) and the mainland of Tromsdalen. This city is not only the capital of Northern Norway and the Arctic region as a whole — the Arctic Council Permanent Secretariat is headquar-tered here — but also one of the best places to see the Northern Lights. In the winter you can see the Northern Lights (mostly green-hued) almost every day. In addition, Tromsø is referred to as the ‘Northern Paris’ based on its unwavering support for the arts.

The Bolshoi ballet performed at the Northern Lights International Music Festival — named after the stunning natural phenomena — held in Tromsø, now in its 26th year

The northern land of lights

Norway

Each month, Oil Journal will publish a travel piece from a country where LUKOIL Overseas operates. For feedback or contributions, write to oiljournal@lukoil-overseas.com

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B y G r i G o r y V o l c h e k

Green is good The Northern Lights is one of nature’s most awe-inspiring phenomena and a massive tourist draw