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Lukoil finds „liquids” after drilling Saudi Arabian field

OAO Lukoil, Russia's largest oil producer, said it found „liquids” after exploration drilling of a field in Saudi Arabia near the world's biggest oilfield.

Lukoil owns 80% of the rights to develop the 30,000-square-kilometer (12,000-square-mile) block A in the eastern Rub al-Khali basin, south of Ghawar, the world's biggest oil field. Saudi Aramco, the world's biggest oil producer, owns the other 20% of the five-year exploration project. In the second half of the year Lukoil plans „to receive interpretation of the first results from the exploratory drilling” last year, Gennady Krasovsky, the head of Lukoil investor relations, said yesterday in London. „This project is supposed to be natural gas, but there is now understanding we are going to have liquids,” possibly gas condensate. Lukoil, Russia's largest oil producer, which pumps most of its crude in western Siberia and Russia's Arctic, is developing exploration and production projects in Kazakhstan, Azerbaijan, Uzbekistan, Iran, Egypt, Colombia, and Venezuela and is seeking oil rights in Iraq.

Lukoil will be allowed to extract and market gas condensate under the agreement with the Saudi Arabian government, Krasovsky said. Any crude oil discovered would belong to Saudi Arabia, which would repay Lukoil's investments. In case of a natural gas discovery, the fuel will be sold to Saudis with some margin. „It's a unique agreement between the Saudis and a foreign company,” Krasovsky said. „It's the first time they are going to give some liquids to the foreign company.” Lukoil plans to produce as much as 20% of oil and gas outside of Russia by 2016, up from the 7% share last year. It pumped 2.1 million barrels of oil and gas in the first nine months of last year, according to the company report. (Bloomberg)