LONDON, November 10. /TASS/. Russian oil company Lukoil has declared force majeure at its West Qurna-2 oil field in Iraq following the imposition of sanctions by the United States and the United Kingdom, Reuters reported, citing sources.
According to the sources, Iraq suspended all financial payments and crude shipments to the company after the US and British sanctions came into effect in October. On November 4, Lukoil sent a letter to the country’s Ministry of Oil citing "force majeure conditions preventing it from continuing normal operations at West Qurna-2."
A representative of Iraq’s oil industry told the agency that the company may halt production and fully withdraw from the project if the situation is not resolved within six months. According to Reuters, the West Qurna-2 field, which currently produces about 480,000 barrels of oil per day, accounts for roughly 9% of Iraq’s total crude output.
A manager at West Qurna-2 also told the agency that on November 7 Lukoil "terminated the services of all non-Russian foreign staff, meaning only Russian and Iraqi Lukoil staff remain." At the same time, according to an oil ministry official, "payments to Lukoil will remain frozen until there is a contractual adjustment securing a mechanism for developing the oilfield and a way of making payments to non-sanctioned entities."
TASS has requested comment from Lukoil.
In October, the United States and the United Kingdom added Lukoil to their sanctions lists. Following this, the company announced its intention to sell its international assets and said it had received an offer from international oil trader Gunvor to acquire Lukoil International GmbH, which holds the company’s overseas assets. Gunvor later withdrew the offer after the US Department of the Treasury stated that it does not plan to issue the company a license enabling it to conduct business and receive profit until the conflict in Ukraine is resolved.