Russia’s biggest independent oil producer – LUKoil is mulling fresh investments in three West African countries, including Liberia and has met top officials from these countries. The proposed investment is part of LUKoil’s proposed $9 billion overseas investment.
According to the latest corporate newsletter Neftyanie Vedomosti, Andrei Kuzyayev – President of LUKoil Overseas, has recently met Ghana’s Energy Minister Joe Oteng Adjei to discuss expansion of existing projects as well as fresh investments to develop new oilfield projects.
After leaving Ghana, Kuzyayev went to Freetown – the capital of Sierra Leone while the company’s Vice President of Overseas operations Dmitry Timoshenko went to Monrovia, capital of Liberia.
Countries like Liberia and Sierra Leone “which have just come through terrible civil wars … are today, with the interest of foreign investors, quickly resurrecting their shattered economies”, said a publication by the company. It is estimated that both the countries have large untapped offshore oil reserves.
LUKoil will invest $3 billion every year starting 2011 till 2013 in overseas assets, Kuzyayev had said in March.
Valery Nesterov – analyst at investment bank Troika Dialog said that West African continent is an interesting prospect for many international companies. “I think almost all Russian companies will be looking at the West African shelf — including Rosneft and TNK-BP”, he said.
LUKoil’s prospective reserves hold 35 million barrels of oil in West Africa. West Africa may hold more reserves than West Siberia, the company said in September.
Competing against state-run giants, LUKoil has “limited access to (new potential) Russian resources,” said Nesterov. “LUKoil is forced to diversify abroad in order to spread the risks of working in Russia”, he added.
LUKoil is the only operator that has experience in deep water drilling and is currently busy drilling in deep West African waters.
“They are the only Russian company who are working offshore at such depths”, said Artyom Konchin - analyst at UniCredit Securities.In future, the experience and ability to extract oil from deep continental shelves may give advantage to Russian companies and ensure that they bag new contracts.
LUKoil though has experience in drilling deep wells in Russian continental shelves, West African wells run deeper. They are gaining “very useful experience for future drilling operations”, Nesterov said.
Rosneft is currently drilling in the Black Sea shelf with US giant Chevron. Rosneft may partner with a new company in the future, said Nesterov.
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